RIB Software invests US$42m to acquire 60% of USA-based BSD (Building Systems Design), strengthens its estimating and product data technologies, and gets a bridgehead in north America.
RIB Software, the Stuttgart, Germany-based provider of cloud-based technologies for the construction and real estate industries has invested US$42m to acquire 60% of the Atlanta, USA-based BSD (Building Systems Design) – a cloud software platform for building specifications together with data and analytics solutions for North American building product manufacturers. The deal strengthens RIB’s kernel of estimating and product data technologies, while also giving the company a strong bridgehead for expansion in the north American market.
The remaining 40% of the company is held by the BSD executive management team consisting of CEO Christopher Anderson (below centre), executive chairman Iain Melville (left), and chief innovation officer Arol Wolford (right), together with the Construction Specification Institute (CSI), whose mission it is to advance building information management. Prior to joining BSD, Anderson served in executive roles in the Gordian Group and RS Means; Melville was CEO for Construction Market Data (CMD) and RS Means. Wolford is the founder of CMD and a board member of Revit Technology Corporation.
The company was founded in 1983 to develop commercial software for the US federal government (some of its construction cost estimating software is still used by the US Army Corps of Engineers and the Department of Defense). The CSI had a majority stake in BSD from 2010 to 2017, at which point the current management team, and an investment from Caltius Structured Capital, set the company on a new course.
BSD provides thousands of American architects, engineers, project developers, investors, and building materials suppliers with a cloud data platform for the development of technical building specifications and the definition of products and construction services. Manufacturers can add their products to the building catalogue in the cloud. Approximately 4,000 new American construction projects are listed on the platform each month. Manufacturers can thus position their products directly at the point of sale. Currently more than 10,000 tendering engineers work within the platform and the cancellation rate of the annual users is far below 10%.
The two flagship products SpecLink and SpecLive will be integrated on the MTWO cloud platform and expanded via Managed Services (MSP) for enterprise customers. The BSD products will be supplemented with the virtual assistant McTWO, the artificial intelligence (AI), with smart Analytics. The 100 RIB Software iTWO 4.0 modules such as CX (Collaboration Platform), Supply Chain Management (SCM), Predictive Pricing, Modular Construction, Cost Estimation, and Value Engineering will be optimally connected with SpecLink and SpecLive. In the medium term, new business models based on xTWO technology are also planned.
According to RIB, BSD’s annual recurring revenue (ARR) is forecasted to exceed US$14m in 2019 with organic growth of approximately 25%. The addressable market for BSD products in the USA and Canada is over US$3 billion. Through BSD, up to 500,000 users for the MTWO cloud platform, driven by BIM and digital transformation, can be converted in the medium term from 8,000 construction suppliers, 80,000 architecture and engineering firms with over 10 employees, 150,000 construction companies, and 270,000 owners.
The addressable market in the 26 countries covered by the RIB Group is over US$10 billion (ARR) and over 1 million MTWO platform users. The RIB total investment, including expansion funds, is US$42m (€37.6 million) and represents the largest single investment in the RIB Group’s 50+ year history. This latest deal also comes just over a month after a strategic investment in the UK’s CADline.
Tom Wolf, CEO of RIB Group says:
“The investment in BSD demonstrates RIB Group’s strong commitment to the U.S. market. McTWO welcomes with Arol, Iain and Chris some of the strongest Executives and investors in the global AEC industry. The integration of 100 software modules connected to millions of BSD content data in the MTWO cloud platform super charged with McTWO our virtual AI assistant and managed data services has the potential now to digital transform the building and infrastructure industry to one of the most advanced industries. Re-platforming concepts like MTWO, combined with BSD data services, will enable developers and owners to build modern cities and infrastructure tailored for Gen Z and following generations.”
Chris Anderson, BSD president and CEO, says:
“At BSD, our goal is to create advanced technology designed to make collaboration easier, including seamless BIM integration and revolutionary cloud technology. RIB’s focus on MTWO and McTWO, cloud and AI based platforms for the construction industry perfectly aligns with BSD’s strategy. We are looking forward to working with RIB in this expanding area to push the digitization and transformation of a whole industry.”
This deal fulfils predictions made in 2018 by RIB COO Mads Bording, right, about RIB’s continued cloud expansion (post). He told Extranet Evolution the technology market was evolving towards support for more collaborative and value-adding work which demands “a more democratised end-to-end process leveraging data in the model, helping companies make money from the data in BIM”. Overcoming the inertia or resistance of 55-year-old cost estimators or engineers was vital, he said.
RIB Group grew 26% in 2018, boosted by its SaaS operations, with its Microsoft partnership expected to grow its SaaS user base ten-fold in 2019 (post).
Update (28 August 2019) – In another US-related expansion, RIB has invested US$26.4m for a 60% share in California-based U.S. CAD, an AEC technology reseller and integrator (announcement). Also an Autodesk Platinum partner, U.S. CAD services over 50.000 active subscribers across the US through ten office locations. In April 2019, RIB invested in UK reseller Cadline.