By Randall S. Newton
Editor-in-Chief
Software firm netGuru, Inc., has agreed on terms to sell its Research Engineers International (REI) business and market-leading STAAD structural engineering and civil engineering product lines to Bentley Systems, Incorporated, for $23.5 million in cash.
The transaction brings into the Bentley camp the structural engineering analysis software most popular with Bentley’s clientele—the largest firms in AEC. According to REI, STAAD.Pro is the choice of 47 out of 50 leading Structural Engineering firms, 46 out of 50 state DOT’s and seven out of the top 10 engineering universities. It is the only structural analysis and design software that meets the requirements of the US Nuclear Regulatory Commission. Bentley should not have trouble fully integrating the STAAD line, since it is fully COM (Component Object Model) compliant and designed using an open architecture.
Other products in the STAAD line include STAAD.beava, used inside STAAD.Pro to analyze 3D influence surfaces; STAAD.etc, a set of smaller structural engineering software tools; Sectionwizard, for calculating section properties; Layout, an engineering calculation pad; autoCivilplus, a civil design program; and ADLPipe, a piping stress analysis tool.
Under the terms of the agreement, Bentley would acquire the worldwide operations associated with REI, including STAAD structural analysis and design product line, software and product development, customer support and relationships, and offices associated with the worldwide business, including offices in Yorba Linda, Calif.; Bristol, UK; and Kolkata, India; as well as REI sales offices in other parts of Europe and Asia. netGuru would retain its collaborative software operations and products, including eReview and ForReview, and its information technology and engineering business process outsourcing services businesses. At the close of the sale, the parties would enter into a transitional services agreement under which, among other things, netGuru would retain the use of REI facilities for its retained businesses.
The sale is subject to various closing conditions, including approval by netGuru stockholders and compliance with regulatory requirements. If approved, the sale is expected to close before the end of 2005. A portion of the sale proceeds is expected to be allocated to transaction costs, applicable taxes, and the retirement of outstanding debt. Other terms include a $1 million break-up fee to be paid by netGuru to Bentley if the agreement is terminated because the required approval is not obtained from the Company's stockholders, or it is determined that certain fiduciary obligations require that the asset sale not be completed. Should the sale be completed, however, Bentley would reimburse netGuru up to $250,000 for legal and financial expenses incurred in connection with the transaction.
netGuru Chairman and Chief Executive Amrit Das said in a prepared statement, “The engineering software industry has been consolidating and moving toward full integration of software capabilities. The joining of REI's engineering operations, including the STAAD brand of software, and services and support, with Bentley as the leading software provider to the AEC market, would form a powerful complement that would be able to provide seamless workflow processing capabilities for engineers around the world.
“From a financial perspective, STAAD.Pro's success and consistent performance of REI have created an opportunity to realize significant value that would strengthen our balance sheet with a substantial cash position and therefore the financial resources to allow management to explore a broad range of strategic opportunities to maximize shareholder value,” Das added.
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