GE Digital Sticks Another Feather in Its Industrial Internet Cap
On November 14, industrial heavyweight General Electric acquired ServiceMax, a global provider of field service management software based in California.
GE acquired ServiceMax
On November 14, 2016, industrial heavyweight General Electric (GE) acquired ServiceMax, a global provider of field service management software based in California. With ServiceMax, GE would strengthen its industrial Internet ambitions. During the past two months, GE has been on an acquisition spree, pocketing companies like LM Wind Power, Arcam, and SLM Solutions.
The $915-million purchase consideration is based on an estimate of 15.2x ServiceMax’s fiscal 2016 revenue of $60 million. ServiceMax offers field service management software, which is an estimated $25-billion market worldwide, and provides solutions for 20 million people engaged in the installation, maintenance, and repair of machines across dozens of industries. ServiceMax also offers complete end-to-end mobile and cloud-based technology for the industrial sector.
What the CEOs said
GE Digital CEO (chief executive officer) Bill Ruh reportedly stated the following about the deal: “This acquisition builds upon our ongoing efforts to enhance our overall technology stack around the Predix platform and advance our Industrial Internet vision. This transaction, along with our previous acquisitions of Wurldtech and Meridium, is directly aligned with our strategy to drive growth both inorganically and organically by building the capabilities to support the digital industrial transformation through Predix, APM, and the Digital Thread.”
ServiceMax CEO Dave Yarnold stated: “The transaction will help position ServiceMax to reach its next phase of growth by having access to GE’s broad and advanced industrial portfolio, deep domain expertise and substantial customer footprint. We look forward to benefitting from GE’s experience, capabilities, and resources as we expand into new markets while continuing to deliver the best tools to help customers maximize productivity and efficiency.”
Investors interested in holding GE indirectly can opt for ETFs like the iShares Global Industrials ETF (EXI). GE makes up 7.5% of EXI, whose other major industrial holdings include 3M Company (MMM), Boeing (BA), and Honeywell International (HON).
Continue to the corresponding part of this series for a look at how ServiceMax could fuel GE’s industrial Internet dream.