Bentley Systems is spending around US$1 billion to buy New Zealand-based geoscience modelling software provider, Seequent.
Bentley Systems has announced an investor-backed deal led by Accel-KKR to acquire Seequent. The Christchurch, New Zealand-based business specialises in geological and geophysical modeling, geotechnical stability, and cloud services for geodata management, visibility, and collaboration. The deal involves US$900 million in cash, plus just over three million Bentley Class B shares.
Bentley says the Seequent acquisition will “deepen the potential of infrastructure digital twins to help understand and mitigate environmental risks, advancing resilience and sustainability.” Once the deal is completed, Seequent will operate as a stand-alone Bentley subsidiary. Seequent’s current chief operating officer Graham Grant will succeed the retiring CEO Shaun Maloney and report to Bentley’s chief product officer Nicholas Cumins.
Seequent deal logic
Seequent has over 430 employees in 16 office locations, serving geologists, hydrogeologists, geophysicists, geotechnical engineers, and civil engineers in over 100 countries, plus the world’s top mining companies. Its established presence in mineral-intensive geographies such as South America and southern Africa is expected to accelerate Bentley’s overall opportunities in these regions with significant infrastructure requirements. In turn, Bentley’s established presence in China, and its mainstay reach across civil engineering sectors, is expected to accelerate Seequent’s expansion in new markets.
Bentley says its current offerings enable digital twins to incorporate what’s constructed “near surface,” including foundations, drainage facilities, buried utilities, tunnels, and subsea structures. Now, the addition of Seequent will “make it possible for infrastructure digital twins to reach full subsurface depths, augmenting environmental resilience against flood, seismic, climate, and water security threats”.
Seequent had been planning an initial public offering (IPO) in 2021. Tom Barnds, co-managing partner at Accel-KKR and Seequent board member, said, “We had been looking forward to Seequent’s IPO this year, but we are so convinced of the logic of this combination that we are glad to anticipate instead becoming Bentley shareholders.”
Seequent first applied implicit modeling technology to geological science more than 15 years ago. It began using mathematical tools to derive and visualize 3D geological models from measured data and user interpretation. This advance caused a “leapfrogging” paradigm shift in understanding of the earth’s subsurface. Geoscientists and others are increasingly able to uncover and visualise valuable insights about environmental conditions and challenges.
Seequent’s products include Leapfrog, its leading product for 3D geological modeling and visualization, Geosoft for 3D earth modeling and geoscience data management, and GeoStudio for geotechnical slope stability and deformation modeling. Bentley’s complementary geotechnical engineering software portfolio, including PLAXIS, gINT, and OpenGround, will be integrated in due course to support open digital workflows from borehole and drillhole data to geological models and geotechnical analysis applications.
The mining industry, with its economic sensitivity and environmental responsibilities, was the first and fastest to adopt 3D earth modeling, superseding traditional 2D processes to speed and improve decision cycles. Seequent recognized the potential, for all major infrastructure engineering projects and assets to likewise “leapfrog” traditional 2D subsurface modeling and simulation processes. Leapfrog’s usage, often in conjunction with Bentley’s software offerings, has been growing consistently in civil infrastructure sectors. Seequent is a leader in 3D modeling for geothermal energy sources, and its software and cloud services provide the important geosciences context for water resources simulations and environmental engineering.
Bentley CEO Greg Bentley said:
“We can be very confident about Seequent’s contribution to our shared future not only because of our product synergies, but because we recognize in Seequent’s trajectory an echo of the playbook that made Bentley Systems successful—except they have grown faster! They have made farsighted decisions to benefit the future at every stage: identifying and then laser-focusing on the 3D “vertical” opportunity in earth modeling, institutionalizing a subscription commercial model from the outset, directly populating the appropriate global markets, acquiring and consolidating the best software for adjacent disciplines, and bringing it all together with cloud services, ready for digital twins advancement together.”
Seequent CEO Shaun Maloneysaid:
“By ‘leapfrogging ahead’ with Bentley to align geosciences with infrastructure engineering through deeper digital twins, Seequent underscores our conviction that better understanding of the earth creates a better world for all. Users and accounts of Seequent, as a Bentley Company, can expect business as usual, with many product and commercial synergies eventually forthcoming.”
Bentley’s CFO David Hollister said:
“The transaction is expected to close in Q2, with the cash consideration settled via a combination of cash on hand and availability under our undrawn $850 million revolving credit facility. We expect Seequent to contribute in excess of $80 million to our ARR during this year. Seequent impressively has a historical and current organic revenue growth rate which, coupled with an operating margin profile similar to ours, makes Seequent accretive to our financial model.”
The Extranet Evolution perspective
This latest Bentley acquisition is a sizeable one, similar in magnitude to Autodesk’s recent acquisition of water engineering software provider Innovyze (February 2021 post). It is also the second major deal EE has tracked regarding a New Zealand-based engineering software business – just under a year ago, Germany’s thinkproject acquired highways asset management software developer RAMM (April 2020 post).
Seequent’s approach to data is also similar to Bentley’s. The latter is historically associated with powerful on-premise design tools, backed by a growing portfolio of online collaboration capabilities. In addition to Leapfrog, etc, Seequent has also developed a suite of cloud services. Seequent Central allows users to visualise, track, integrate, and manage their geoscience data via a centralised, auditable environment.
Update (23 June 2021) – On 17 June, Bentley announced the completion of its acquisition of Seequent Holdings Limited, for approximately $900 million in cash (for a debt free business and subject to final working capital adjustments) plus 3,141,342 BSY Class B shares.