TA to Sell Power Line to Bentley Systems
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TA to Sell Power Line to Bentley Systems

Power Line's modeling software is viewed by many power transmission engineers as the industry standard

Power Line's modeling software is used for the structural and geometric design of electric power lines

SOURCE: Power Line Systems

TA Associates has agreed to sell Power Line Systems, a provider of software used to design overhead electric power transmission lines and structures, to publicly traded Bentley Systems for $700 million. The purchase price is payable in cash or, at the discretion of Bentley Systems, a combination of at least $350 million in cash and common stock.

Power Line Systems was founded in 1984 by University of Wisconsin professor Dr. Alain Peyrot to provide consulting services and develop engineering software for the structural and geometric design of electric power lines. Power Line’s customers range from small consulting organizations, fabricators and municipal utilities to over half of the hundred largest generating utilities in the United States and large international generating utilities including BC Hydro, Hydro Quebec, Power Link Queensland, and Electricité de France.

Power Line products are available through a subscription model and, according to the company, it is the worldwide leader in software for transmission lines and in the United States is viewed by many transmission engineers as the industry standard. Power Line, led by CEO Otto Lynch and headquartered in Madison, Wisconsin, has more than 1,600 customers in more than 125 countries. At closing, which is expected by year-end, Power Line will continue to be led by Mr. Lynch and will become part of Bentley’s newly-formed Grid Integration Group.

“Otto and the Power Line team have created the standard for efficiency and software-enablement of the indispensable work of power transmission engineers,” said Ashu Agrawal, a managing director at TA Associates. “However, the accelerated pace of the global energy transition creates a need for further expansion of and innovation in the grid. We’re confident Bentley Systems can provide the right surrounding constellation to expand Power Line Systems toward full grid digital twins.”

Bentley Systems (NASDAQ: BSY) is a provider of modeling and simulation software that is used for the design, construction, and operations of roads and bridges, rail and transit, water and wastewater, public works and utilities, buildings and campuses, and industrial facilities. The company, led by CEO Greg Bentley, was founded in 1984 and is headquartered near Philadelphia in Exton, Pennsylvania.

“Acquiring Power Line fills a very important gap in our energy grid offerings at this fortuitous juncture when grid upgrades, resilience, and integration combine to drive one of the most urgent and sustained growth opportunities we’ve ever seen,” said Mr. Bentley. “We look forward to welcoming CEO Otto Lynch and CTO Erik Jacobsen, and their colleagues—who have shown how much can be accomplished by so few, through virtuosity in software development and relentless commitment to engineering advancement. Our global go-to-market resources can now be deployed to take full advantage of burgeoning market demand—a consequence of the momentum driving incremental renewable energy sources and ubiquitous electrification—for going digital in transmission, and integrated grid, engineering.”

Bentley Systems has more than 4,000 employees and annual revenues of more than $800 million. For the trailing twelve months ending September 30, 2021, Bentley Systems had revenues of $912 million and EBITDA of $176 million (a margin of 19%). In a presentation to investors, Bentley Systems has indicated that Power Line’s EBITDA margins are nearly twice its EBITDA margins.

Earlier in 2021, Bentley Systems acquired New Zealand-based Seequent, a provider of software used for geological and geophysical 3D modeling, and cloud services for geodata management, for $1.05 billion – $900 million in cash – from Accel-KKR.

TA Associates, which acquired Power Line in 2018, makes equity investments of $75 million to $500 million in middle-market growth companies that are active in technology, healthcare, financial services, consumer, and business services. In April 2019, TA held a first, final, and hard cap closing of its thirteenth fund, TA XIII LP, with total capital commitments of $8.5 billion. The firm was founded in 1968 and has more than 85 investment professionals with offices in Boston, Menlo Park, London, Mumbai, and Hong Kong.

Lazard is the financial advisor to Power Line and TA Associates, and Goldman Sachs is advising Bentley Systems.

© 2021 Private Equity Professional | November 23, 2021

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