NACKA STRAND, Sweden,
Feb. 25, 2022 /PRNewswire/ -- Hexagon
AB, a global leader in digital reality solutions combining sensor,
software and autonomous technologies, today announced the
acquisition of ETQ, a leading provider of SaaS-based QMS (quality
management system), EHS (environment, health and safety) and
compliance management software.
Customers have long relied on ETQ's future-ready, truly
multi-tenant QMS solution, ETQ Reliance. It provides the data
backbone for automating the collection and delivery of
manufacturing quality control data, non-conformance reports,
customer feedback and more, providing an enterprise view of quality
management across the entire product lifecycle. Its broad portfolio
of best-in-class applications comes with out-of-the-box
functionality and no-code configurability, enabling customers to
tailor the solution to their unique needs and optimise critical
business processes to achieve their quality, safety and
environmental goals.
"Our leadership in quality data capture and smart digital realities
makes ETQ an excellent fit. The acquisition brings a mix of talent
and deep quality expertise across extensive industry verticals,
targeting the rapidly widening gap between quality data creation
and leverage," says Hexagon President and CEO Ola Rollén.
"Integrating data from our metrology systems with Reliance leads to
increasing levels of autonomy that improve a customer's ability to
put quality and process data to work. ETQ also enables connectivity
of quality data and processes across supply chains, bringing
suppliers and customers into one system."
ETQ's advanced data management capabilities, driven by machine
learning and artificial intelligence, make quality data fully
actionable and available further upstream. Not only does this
reduce defects, scrap, rework, and recalls, but it also enables an
autonomous feedback loop, digital information trail and virtuous
cycle of continuous improvement.
"Hexagon has long been in the business of enabling customers to
realise the benefits that data-driven automation and product
quality insights bring, including the freedom to create the
undisputed factory floor of tomorrow—one that is self-sufficient,
self-monitoring, self-optimising and self-repairing," continued
Rollén. "With our global footprint, vertical synergies and good
customer fit, which includes our recently acquired EAM business,
ETQ is poised for rapid growth. We're proud to welcome ETQ to the
family as we continue to accelerate our journey to the cloud and
build the world's leading quality stack from shop floor to top
floor."
Founded in 1992, ETQ is headquartered in Massachusetts, USA, with additional offices in
Arizona, USA and Dublin, Ireland. With 185 employees, its team
of quality experts drive customer success across diverse
industries—life sciences, healthcare, heavy manufacturing,
electronics, food and beverage, heavy process, automotive and more.
ETQ will operate as part of Hexagon's Manufacturing Intelligence
division.
Transaction overview
ETQ is expected to generate revenues of around 75 MUSD in 2022 with
an adjusted operating margin of over 35 per cent (cash EBITDA
margins of around 45 per cent, reflecting a SaaS prepayment model).
ETQ has been driving its customer base to SaaS, which is expected
to account for half of bookings in 2022 and has been growing at a
trailing 3-year Compound Annual Growth Rate (CAGR) of 60 per cent.
Given the strong fit across Hexagon's manufacturing and process
industries and the significant scope for geographical expansion,
the transaction is expected to generate sales synergies of over 40
MUSD, with very strong incremental margins, by 2026.
Transaction and integration costs including surplus values in the
purchase price allocations (PPA) and deferred revenue adjustments
affecting the income statement will be communicated as soon as the
calculations are completed.
Hexagon will pay a purchase price of 1,200 MUSD for ETQ on a cash
and debt free basis. The cash consideration will be fully financed
via existing debt facilities resulting in a proforma net debt to
EBITDA ratio of approximately 2.0 after the transaction. ETQ will
be accretive to Hexagon's adjusted earnings (before PPA and other
purchase accounting adjustments) as of closing.
Completion of the transaction is subject to regulatory approvals
and other customary conditions, which are expected to be fully
completed by early in the second quarter 2022.
For further information, please contact:
Maria Luthström, Head of Sustainability and Investor Relations,
Hexagon AB, +46 8 601 26 27, ir@hexagon.com
Kristin Christensen, Chief Marketing
Officer, Hexagon AB, +1 404 554 0972, media@hexagon.com
This is information that Hexagon AB is obliged to make public
pursuant to the EU Market Abuse Regulation. The information was
submitted for publication, through the agency of the contact person
set out above, at 08:00 CET on
25 February 2022.
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SOURCE Hexagon