May 23, 2005
Dassault Systemes To Acquire ABAQUS For Creating Realistic 3D Simulation
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by Jeff Rowe - Contributing Editor
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Dassault Systemes To Acquire ABAQUS For Creating Realistic 3D Simulation

Dassault Systemes announced an agreement to acquire ABAQUS Inc. in an all-cash transaction approximating $413 million, subject to certain adjustments at closing. ABAQUS is the established leader in nonlinear finite element analysis software. DS expects the planned acquisition to be immediately accretive to net income, excluding acquisition costs and the impact of deferred revenue accounting treatment. DS is also unveiling SIMULIA, a scientific, open platform that will enable the integration of all types of simulation applications.

ABAQUS and DS will make realistic simulation accessible to a wider audience and greatly increase ease of use. With this initiative, DS will also diversify into markets beyond its existing manufacturing base. The ABAQUS purchase is a significant step to reshape the large but currently fragmented simulation software market, in which most companies still use niche applications rather than unified solutions. According to industry analysts, the simulation software market is estimated at $2.35 billion today and is expected to grow to $4 billion in the next five years, with average growth of 12 percent per year. Many applications currently in use are internally developed programs, and current
market figures do not take those applications into account.

ABAQUS is well recognized for its best-in-class technology, which companies are increasingly seeking, that is capable of scaling from simple to the most demanding simulations. For example, a simple drop-test simulation enables users to observe the behavior of all of the internal components of a mobile phone. DS will also benefit from ABAQUS's tremendous intellectual capital, embodied by its world-class technology team including 70 PhDs.

"With the best teams, we can transform the industry," said Bernard Charles, president and CEO, Dassault Systemes. "We warmly welcome the impressive ABAQUS team. Together, we will enable our customers to experience virtually what their customers will experience using their products in the real world."

"I am delighted and enthused that Dassault Systemes has selected ABAQUS as the foundation of its strategic investment in simulation technology," said Mark Goldstein, president and CEO, ABAQUS Inc. "As companies continue to adopt performance-centric practices as a fundamental component of product design, the role of simulation will become ever more important to the success of an enterprise. I look forward to the contribution that ABAQUS technologies will bring to Dassault Systemes' PLM solutions while at the same time maintaining our focus on delivering industry-leading advanced finite element solutions to the PLM market in general."

"With total revenues approaching the $100 million threshold on an annual basis, ABAQUS has a high level of both software and recurring software revenue," said Thibault de Tersant, executive vice president and CFO, Dassault Systemes. "Moreover, ABAQUS has a strong level of profitability, which should enable the acquisition to be immediately accretive to earnings excluding acquisition costs and the impact of deferred revenue accounting treatment."

Dassault Systemes estimates that the impact of deferred revenue write-down, as part of purchase accounting adjustments, may result in a loss of revenue of approximately $20 million within twelve months of the completion of the proposed acquisition of ABAQUS.

The transaction is subject to the satisfaction of certain customary conditions and approval by certain regulatory authorities. Neither Dassault Systemes nor ABAQUS will require a shareholder vote. Dassault Systemes expects that the proposed acquisition could be completed by the end of its third fiscal quarter.

SIMULIA will be the new unified, open platform supporting all simulation domains. It will accelerate innovation by supporting the capture and deployment of best practices for predicting product behavior, as well as reduce the cost of ownership for scientific applications. SIMULIA will also give users access to simulation capabilities without requiring the steep learning curve of disparate, traditional simulation tools.

SIMULIA will have the largest open ecosystem available in the simulation market by including the DS Component Application Architecture V5 (CAA V5) ecosystem and existing ABAQUS partners.

"Dassault Systemes' acquisition of ABAQUS--the gold standard for nonlinear simulation--marks a new beginning for simulation," said Charles Foundyller, president and CEO of Daratech, Inc. "This could be the tipping point that ushers simulation into the mainstream of PLM. For this reason, I expect Dassault Systemes' vision for SIMULIA to be widely accepted throughout the manufacturing industry and beyond."

The proposed acquisition is subject to customary closing conditions and regulatory approvals including, among others, Hart-Scott Rodino, Exon-Florio and merger control authorities, principally in the United States and Germany.

SIMULIA will join the other members of the Dassault family that include CATIA (for defining and simulating products), ENOVIA (for managing product lifecycle information), and DELMIA (for defining and simulating manufacturing processes) and further extends the company's overall simulation and analysis capabilities.

Founded in 1978, ABAQUS has focused on and developed software and services for advanced finite element analysis (FEA). ABAQUS has offered a comprehensive range of products that can handle simple to complex linear and nonlinear engineering problems, using the finite element method. Also, a wide range of structural, thermal, and coupled analyses are supported.

Like virtually all simulation and analysis tools, the ABAQUS line is used in three broad categories:
  • Evaluating product concepts
  • Analyzing product designs
  • Simulating processes
  • As it stands now, the main ABAQUS products include the following:

    ABAQUS/Standard - for solving traditional implicit finite element analyses, such as static, dynamics, thermal with a wide range of contact and nonlinear material options. ABAQUS/Standard also has optional add-on and interface products that address design sensitivity analysis, offshore engineering, and integration with third-party software, such as plastic injection molding analysis.

    As the company's flagship product, ABAQUS/Standard is supported within the ABAQUS/CAE modeling environment for all common pre- and post processing. In addition, ABAQUS/Standard can be accessed from within many modeling environments.

    An interesting characteristic of ABAQUS is the fact that from any point within an ABAQUS/Standard run, the analysis can be "imported" as the starting conditions for continuation in ABAQUS/Explicit (see product description below). Similarly, an analysis that starts in ABAQUS/Explicit can be imported as the starting conditions for continuation in ABAQUS/Standard. The flexibility provided by this integration allows ABAQUS/Standard to be applied to those portions of the analysis that are well-suited to an implicit solution technique, such as static, low-speed dynamic, or steady-state transport analyses; while ABAQUS/Explicit might be applied to those portions of an analysis where high-speed,
    nonlinear, transient response is more important.

    ABAQUS/Explicit - provides ABAQUS analysis technology focused on transient dynamics and quasi-static analyses using an explicit approach for applications such as drop test, crushing, and manufacturing processes.

    ABAQUS/Explicit provides finite element techniques that simulate a wide variety of dynamic and quasi-static events.

    ABAQUS/CAE - provides a modeling and visualization environment for ABAQUS analysis products. With direct access to CAD models, advanced meshing and visualization, and with an exclusive view towards ABAQUS analysis products, ABAQUS/CAE is the modeling environment for many ABAQUS users.

    With ABAQUS/CAE you can create, edit, monitor, diagnose, and visualize advanced ABAQUS analyses. ABAQUS/CAE integrates modeling, analysis, job management, and results visualization. Concepts such as feature-based, parametric modeling make ABAQUS/CAE a pre- and postprocessor.

    With the acquisition of ABAQUS, and the fact that it already owns COSMOS (through SolidWorks), Dassault Systemes has quite a strong foothold in the analysis and simulation arena. This acquisition should also strengthen its overall simulation and analysis posture with CATIA, DELMIA, and ENOVIA. This acquisition also signals a continuance of consolidation in the CAD and CAE market spaces - a trend that shows no signs of slowing, just growing.

    The Week's Top 5

    At MCADCafé we track many things, including the stories that have attracted the most interest from our subscribers. Below are the five news items that were the most viewed during last week.

    Alias announced its DirectConnect for SolidWorks that allows Alias ImageStudio software to rapidly transform SolidWorks 3D data into high-quality, photo-realistic images for design evaluation, presentation, and promotion. Alias ImageStudio is an easy-to-use, cost-effective software tool for creating professional quality, rendered images from 3D data.

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    -- Jeff Rowe, Contributing Editor.


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