Siemens has agreed to buy application developer Mendix for $697 million.
The engineering giant says Mendix will continue as a distinct company and provide the “low-code” cloud software on which it has built its reputation.
The closing of transaction is expected in the first quarter of fiscal year 2019.
Siemens says that, under the agreement, Mendix will retain its “distinct brand, culture and continue serving customers across the full range of industries with its unique platform and broad ecosystem and community”.
Siemens will continue to invest in Mendix’s independent product roadmap, continuing its legacy as “the most innovative, open low-code cloud platform”.
Mendix will be part of the software business of Siemens’ Digital Factory division, with the Mendix platform also utilized across other divisions, and no doubt strengthen Siemens industrial internet platform MindSphere and be part of the company’s overall product lifecycle management offering.
As enterprises invest to digitalize their operations, demand for business applications is growing significantly faster than the capacity of IT organizations to deliver them.
Low-code application development platforms provide features for rapid development, deployment and execution of applications in the cloud.
Klaus Helmrich, member of the managing board of Siemens, says: “We acquire Mendix to extend our leading position in digitalizing the industrial world, which is a cornerstone of our Vision 2020+.
“Mendix is a leader in the rapidly expanding low-code segment and their platform will help our customers to adopt MindSphere even faster by accelerating cloud-based application development for the industrial internet of things.”
Jan Mrosik, CEO of the digital factory division, says: “As part of our digitalization strategy, Siemens continues to invest in software offerings for the Digital Enterprise.
“With the acquisition of Mendix, Siemens continues to add to its comprehensive Digital Enterprise and MindSphere IoT portfolio, with cloud domain expertise, cloud agnostic platform solutions and highly skilled people.”
Mendix was founded in 2005 in Rotterdam, Netherlands and is headquartered in Boston, Massachusetts. The company has over 400 employees and its software-as-a-service business model results in over 90 percent of sales being recurring.
Siemens expects Mendix to continue to experience strong growth in the future in both its existing customer segments and across the Siemens customer base.
Mendix will accelerate Siemens’ current cloud, IoT and Digital Enterprise software capabilities. Mendix will also continue to deploy its technology to customers and partners across all verticals and technology ecosystem.
Derek Roos, co-founder and CEO of Mendix, says: “When we pioneered the low-code market over a decade ago, we had a bold vision to help customers change the way they build software, but we never imagined the oceanic opportunity that’s now in front of us.
“I’m thrilled to accelerate our vision at a much larger scale with the incredible team, assets, industry know-how and footprint of Siemens behind us.
“Being part of Siemens will allow us to serve our customers even better by accelerating our research and development vision, adding a much larger pool of go-to-market resources, and leveraging an enormous global infrastructure.
“And we’ll do this while maintaining our unique culture, brand and R&D capability that has allowed us to become the leader in our space – I can’t think of a better outcome for our customers, community, partners and team.”
The closing of the transaction is subject to customary conditions and is expected in the first quarter of fiscal year 2019.
Siemens expects to achieve synergies through a combination of revenue growth and anticipated margin expansion, representing a net present value of more than $580 million.
Derek Roos will remain CEO of the company and join the Siemens PLM Software senior leadership team.