That depends upon how the relationship with Hexagon progresses. As Infor loses one of its best selling solutions, the question is, will it lose substantial cross-sell opportunities?

There is a better fit within the Hexagon portfolio than the rest of Infor.

If this deal pans out, it is a great deal for Hexagon. Effectively by 2026, if the growth and cross-sell opportunities are realised, the multiplier drops to 3X. It is also rapidly growing, with an ARR growth of around 35% annually. It will derive around 40% of its revenue and over 50% of software revenue from its SaaS solution in 2021. Also, 70% of the Infor revenues are recurring, with its customer base transitioning to the cloud steadily, if not rapidly. That potentially reduces the effective multiple to less than 10X.

Hexagon believes that the EAM solution will increase other solution revenues by US$100 million by 2026. With Infor EAM set to generate US$184 million in 2021, this puts the transaction at 15X annual revenue, which may seem high, but there is a good fit between the two companies. Still, Infor EAM has continued its growth over recent weeks, with the Sparrow Group highlighted as one of the new customers. The purchase price ended up being slightly about the $2.75 billion that was first suggested. Hexagon’s main shareholder, MSB, will also nominate Brett Watson, President of Koch Equity Development, LLC, to the board of directors as soon as the process allows. The deal includes US$792 million in cash and 132.6 million series B Shares, which sees Infor own 4.9% equity of Hexagon AB and 3.6% of the vote. Hexagon has completed the acquisition of the Infor EAM business in a deal that will cost US$2.82 billion.

Hexagon eam infor