Last updated on June 29th, 2021 at 10:45 am
Milwaukee-based Rockwell Automation Inc. will pay $2.22 billion to acquire Michigan-based Plex Systems, which offers smart manufacturing software-as-a-service.
Plex’s products include advanced manufacturing execution systems, quality, and supply chain management. It’s software helps customers connect, automate, track and analyze operations and supply chains. The company had more than $150 million sales in 2020. Based in Troy, Michigan, Plex has 500 employees, with around 200 working on product development.
“This acquisition will accelerate our strategy to bring the Connected Enterprise to life, driving faster time to value for our customers as they increasingly adopt cloud solutions to improve resilience, agility, and sustainability in their operations,” said Blake Moret, chairman and chief executive officer of Rockwell. “Combining Plex’s cutting-edge cloud technology with Rockwell’s existing software portfolio and domain expertise will add customer value and create more ways to win.”
Rockwell executives said the deal would accelerate by two years the company’s effort to have 10% of its revenue come from annual recurring revenue.
The deal is expected to close in Rockwell’s fourth quarter.
Moret called the deal “the next big step” in Rockwell’s transformation.
“We’re moving fast because manufacturers are picking up the pace and because we have the opportunity to leap ahead with new value,” Moret said.
Rockwell already has a presence in some of the same software offerings Plex has, but they are primarily on the premise of manufacturers. Plex brings Rockwell greater cloud computing offerings.
“We’ve been looking at Plex as a potential target for quite some time,” Moret said, noting Rockwell was impressed with Plex’s retention rates, presence in important industries and the opportunities to expand into other verticals.
“This is a big market that’s picking up the pace in terms of growth,” Moret said of the smart manufacturing software offerings.
The deal itself will be financed with $300 million of cash on hand and $1.9 million of new debt, about half of which will be short-term debt.