Hexagon Buys Bricsys. Does It Matter?

 (Image courtesy of Bricsys.)

At Bricsys’ annual reseller event, which recently concluded in London and was attended by a few hundred, the expectation was to learn about the recent enhancements of BricsCAD. But, the biggest news came from a Hexagon VP, which surprised everyone by revealing that the company had been bought.

Bricsys, a smaller CAD player with big ambitions, may have sought an acquisition after futile attempts at global market expansion. Co-founder and CEO Erik De Keyser, probably hoarse from expounding advantages of BricsCAD over AutoCAD year after year, had done everything right. He had created a CAD product that combined a parity in functionality and offered it a discount price. It was a strategy lifted straight from Autodesk’s old playbook, which it used in the 80s to achieve global domination. It worked a few years later when SolidWorks displaced PTC as the MCAD leader. But, Autodesk’s user base was proving to be intractable. Why on Earth would it not work again?

Entrenched CAD user bases are like the Earth’s tectonic plates. They stay mostly intact as they move, grinding at each other and making upheavals and havoc locally. For the big picture, does it matter?

The Belgium-based Bricsys cites its leadership near home. “We’re big in Benelux,” said Don Strimbu, head of communications and perhaps the company’s lone U.S employee. The company also has some small success in Asian countries, but Bricsys goes largely unnoticed in North America and most of the world.

Bricsys leadership and strength comes almost completely from De Keyser, who helped start Bricsys in 2002. It will be hard to imagine Bricsys without him. No one has emerged as an ascender to the throne.

“I’m not going anywhere,” he reassured the dozen or so press flown in for the occasion, many of whom who may have thought their European vacations were about to end. Hexagon had not been so generous flying journalists around. De Keyser, whose career started as an architect 41 years ago, did not say how long he was planning to stick around.

Terms of the deal were not announced. Public corporations like Hexagon do not have to disclose acquisition costs unless they are “significant,” usually seen as 5 percent of overall revenue. This means any acquisition below $170 million need not be detailed. The news came with a measure of Bricsys revenue: EUR€13 million in 2017. If De Keyser was able to get two times the revenue, the Bricsys acquisition would cost Hexagon about $30 million.

Similar Deals

Hexagon AB, headquartered in Sweden, makes over $3.5 billion in revenue per year. The company, best known for its measurement hardware—surveying and metrology—would now like to be seen as “a global leader in digital solutions.” It has been bolstering its software portfolio, even if it means going away from its core interests and industries. It came as surprise that it would buy MSC Software in 2017, best known for servicing aerospace with simulation software (NASTRAN). It may just have been a bargain. MSC had been losing ground to market leader ANSYS for years. Still, Hexagon paid $834 million, its second biggest acquisition ever. Its biggest acquisition was in 2010, when it paid a whopping $2.1 billion for Intergraph, best known for its piping and process and ship CAD and GIS software.

We are also reminded of other cross-market CAD, CAM and CAE acquisitions.

• 2000: Microsoft paid over $1billion for Visio, only to lose it in a vast portfolio of products.
• 2006: Google acquired the very popular SketchUp but decided it wasn’t relevant to its core.
• 2007: Siemens AG bought UGS for its NX and Teamcenter software for $3.5 billion.
• 2011: 3D Systems bought a distressed Alibre so everyone could make precise models to be 3D printed. They don’t.
• 2012: Google sold SketchUp to Trimble.
• 2013: 3D Systems bought Geomagic so everyone could reverse engineer (copy) existing parts. Good luck with that.
• 2014: GrabCAD was acquired by 3D Systems ($100 million) but downplayed its thriving CAD user community.
• 2015: 3D Systems, additive manufacturer, bought Cimatron for subtractive manufacturing, as if to complete the picture.

“Entering into the U.S. market showed us we needed a bigger presence,” said De Keyser, who is hoping superior sales and marketing by Hexagon will make all the difference in opening up the American market. Hexagon, while headquartered in Sweden, does a substantial amount business in the U.S.

After evaluating the whole list of deals above and their effect, one has to wonder which, if any, company has increased the market share or user base of the CAD, CAM or CAE products they have acquired.

Comments

[Ryan]

This is an easy question. Simply put Dassaults purchase of Solidworks. I'm not sure SW would be nearly as successful without the deep market capabilities and pockets of DS.

[Andy]

I expect that this acquisition from Hexagon will be significant for Bricsys, primarily for the visibility that it will bring to Bricscad software. Bricscad is generally not well known but this will certainly draw attention to a very comparable competitor to the likes of Autodesk's AutoCAD. While it may never reach the adoption that AutoCAD has achieved, I believe it's user-base will certainly increase to a point where it's visible on the 'CAD software used' pie chart.

[Rande Robinson]

The Only company that I think may have done this is Nemetschek with their acquisition of Bluebeam. But even here the Nemetschek "professionals" are from what I can gather causing problems for expanding sales and use of the product farther. The same old story when you replace passion and vision with professional business management you pretty much kill expansion and growth. At least IMHO.