EDS Completes Sale Of UGS PLM Solutions And UGS Launches As An Independent Company

EDS Completes Sale Of UGS PLM Solutions And UGS Launches As An Independent Company

Last Thursday EDS completed its sale of UGS PLM Solutions to a group of three private equity firms for $2.05 billion, before working capital adjustments.

The transaction builds on EDS' strategic growth plan, announced last June, to focus on the company's core information technology and business process outsourcing operations. The transaction further strengthens the company's balance sheet as EDS remains on track to achieve zero net debt and more than $5 billion in liquidity by year-end 2004.

"We continue to execute on the plan outlined to investors last year," said EDS Chairman and CEO Mike Jordan, who was named to lead the company in March 2003. "The successful completion of this transaction aligns with our ongoing drive to strengthen our leadership position as one of only two global technology services providers. The move significantly enhances our financial flexibility and long-term competitive position and will help us continue to focus on growing EDS."

Jordan said the transaction will generate a sizable one-time gain in EDS' second quarter 2004 results to be announced in July.

The agreement to sell UGS PLM Solutions to a group of Bain Capital, Silver Lake Partners and Warburg Pincus was announced March 14, 2004. In October 2003, EDS had announced plans to divest the unit through an IPO or private sale, following a comprehensive assessment of its business portfolio against the strategic plan created by EDS' new leadership team.

"While clearly a healthy and profitable business, UGS PLM Solutions was not a strategic component of our growth strategy," said Jordan. "The completion of this sale enables EDS to continue to focus resources fully on our core strengths and building a compelling market advantage for ourselves and our clients."

As the closing of the acquisition was announced, the company also launched operations as an independent software business under a new corporate brand - UGS. In conjunction with the closing of the private equity transaction, UGS also announced the launch of its new independent website, http://www.ugs.com/.

The companies announced on March 14 a definitive agreement with EDS to purchase UGS for $2.05 billion in cash. The transaction represents the largest private equity investment ever made in a technology company. In the first quarter of 2004, UGS reported 14.8 percent revenue growth and 10.3 percent growth in operating profit over the same period a year earlier. UGS' first quarter 2004 performance marked the third consecutive quarter of strong revenue and operating profit growth as compared to the same period a year earlier. For the last 12 months ending March 31, 2004, UGS reported revenue of US$927 million, adjusted EBITDA of US$215 million and net income of US$106 million. UGS has 3 million licensed seats and 42,000 clients worldwide.

"Today is a watershed day for UGS and our clients as we move forward as an independent software company in partnership with our new sponsors," said UGS Chairman, CEO and President Tony Affuso, who will chair the new company's board. "This transaction represents not only an endorsement of UGS' strategy and leadership position, but also of the PLM industry as a whole. Under the UGS brand, which we believe best leverages our company's equity as a strong and familiar brand with our clients in the PLM space, we believe we are ideally positioned for continued long-term growth."

Without knowing what's been going on behind the scenes, this whole transaction seems to have come off relatively, if not extremely, smoothly so far - especially for a transaction of this magnitude. A lot of things seem to be in place for continuity as the transition takes place for both the corporate and customer sides. Only time will tell if the positive direction for UGS will continue, but all indications are now that indeed it will.

ANSYS Breaks Engineering Simulation Solution Barrier

ANSYS, a provider of simulation software and technologies designed to optimize product development processes, announced that it has become the first engineering simulation company to solve a structural analysis model with more than 100 million degrees of freedom (DOF), making it possible for ANSYS customers to solve models of aircraft engines, automobiles, construction equipment, and other complete systems.

In a joint effort with Silicon Graphics Inc. (SGI), the 111 million DOF structural analysis problem was completed in only a few hours using an SGI Altix computer. DOF refers to the number of equations being solved in an analysis giving an indication of a model's size.

"ANSYS' ability to solve models this large opens the door to an entirely new simulation paradigm. Prior to this capability, a simulation could be conducted only at a less detailed level for a complete model or only at the individual component level for a detailed model. Now, it will be possible to simulate a detailed, complete model directly; potentially shortening design time from months to weeks. Equally important, having a high fidelity comprehensive model can allow trouble spots to be detected much earlier in the design process. This may greatly reduce additional design costs and can provide an even shorter time to market," said Jin Qian, senior analyst at Deere & Company Technical Center.

According to Marc Halpern, research director at Gartner, although simulation accelerates the delivery of quality products to market, users have faced major challenges to realizing the full value. For example, hardware and software limitations have historically made realistic simulations elusive when realism involves highly detailed models and complex physical behavior.

As hardware advances in speed and capacity, ANSYS is committed to being the leader in developing CAE software applications that take advantage of the latest computing power. This leadership provides customers with the best engineering simulation tools for their product development process to help achieve better cost, quality and time metrics.

"The advances that ANSYS has made in enabling engineers to simulate the largest models at high levels of detail promises to deliver significant value to SGI Altix customers," said Dave Parry, senior vice president and general manager, Server and Platform Group at SGI. "This capability takes full advantage of the Altix system's unique ability to combine leading-edge computation performance with very large memory, making ANSYS and Altix a powerful solution for CAE simulation. We are pleased that our collaboration with ANSYS will continue to advance customer capabilities for their CAE needs today and as their requirements grow."

This new offering from ANSYS speaks to its commitment to develop and deliver the best in advanced engineering solutions. In turn, ANSYS has entered into a three-year partnership with SGI to advance the capabilities of ANSYS in parallel processing and large memory solutions.

"The ability to solve 111 million degrees of freedom is just the beginning of the new level of simulation technology that's coming into the marketplace," said Jim Cashman, president and CEO at ANSYS. "We are pleased to announce our partnership with SGI, and we intend to continue to deliver more innovations like this in the future."

Mr. Cashman is right, the ability to solve 111 million DOF does point to a new level of simulation and mathematical acumen that competitors will try to match and surpass. The complexity of the math behind the ability to solve problems of this magnitude cannot be over emphasized - it is an amazing achievement. Modeling, solving, and presenting complex physical behaviors are among the most demanding CAx applications from both pure mathematical and computational standpoints. As far as the computational aspect goes, SGI's Altix superclusters (a type of supercomputer) can scale up to hundreds of 64-bit Intel Itanium2 processors. These superclusters leverage the built-in SGI NUMAlink interconnect fabric, and transfer data across nodes up to 200 times faster than conventional clustering interconnects. Combined, the hardware and the underlying math provided the ability to solve this huge simulation problem.

CIMdata Predicts Delcam Will Again Be Fastest Growing CAM Supplier In 2004

The latest NC Software and Related Services Market Assessment from consulting and market research firm, CIMdata, shows that Delcam was the fastest-growing of the ten leading suppliers of CAM software during 2003. As a result, the company retained its position as the leading world-wide supplier of specialist machining software and associated services during the year. This strong growth is expected to continue during this year, with CIMdata predicting that Delcam will be the fastest-growing of all CAM suppliers in 2004.

Part of the growth is expected to come from Delcam's traditional toolmaking markets. "PowerMILL has established an industry position for 3- and 5-axis milling of molds and dies," commented the report's author, Alan Christman. "The toolpath generation speed is impressive and a wide range of advanced machining strategies is available."

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