January 29, 2007
Nemetschek’s Acquisition of Graphisoft Shares
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Susan Smith - Managing Editor


by Susan Smith - Managing Editor
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Welcome to AECWeekly! In an interview with Janet Franke, Nemetschek Deutschland GmbH, Manager Corporate Communications, AECWeekly learned about the strategy behind Nemetschek’s acquisition of Graphisoft shares.



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Industry News


Nemetschek’s Acquisition of Graphisoft Shares

by Susan Smith


In an interview with Janet Franke, Nemetschek Deutschland GmbH, Manager Corporate Communications, AECWeekly learned about the strategy behind Nemetschek’s acquisition of Graphisoft shares.


AECWeekly: It appears from the outside looking in, with the acquisition of Graphisoft shares, that Nemetschek will then have three disparate software lines. Will this remain the case, or are there plans to integrate all three in some way?


At the moment, we believe there are four important CAD platforms on the AEC market. Three of these come from Nemetschek - Allplan, Archicad and Vectorworks. All the systems have their own place on the market and depending on customer requirements, complement each other to provide a unique offering.


In future users will be able to use the most suitable application from the Nemetschek portfolio. There won't be a standardized CAD for all customers across the world, because our customers are individuals and cannot be molded to fit global standards.


AW: If there are not plans to integrate, what is the purpose of the acquisition from Nemetschek's point of view?


Nemetschek has been on a clear growth course again since 2006.


1.  With Graphisoft, we will be able to strengthen our market position, particularly in the architecture sector. We are the number one in Europe for AEC software solutions and believe we also have good opportunities for growth outside Europe. Nemetschek now has a customer base of 270,000 active customers all over the world.


2.  With the acquisition, the group can greatly improve its business KPIs through a significant growth in sales, a considerable increase in the EBITDA operating profit and an increase in operating cash flow. As of 2007, Nemetschek, will have sales of more than 140 million euros and its target sales figure of 150 million euros is clearly in view.


3.  Together with Graphisoft, Nemetschek will henceforth be offering the powerful product and service range for all customer requirements in the area of real estate planning. The two companies are already among the top providers worldwide in the AEC sector. Globalization activities are in full swing. Over the medium and long term, both companies see better perspectives for their future development.



AW: Will you be moving into more U.S. and North American and possibly Asian markets?


Both companies are international companies. Nemetschek has a very strong focus on Europe, especially Western Europe, as well as having its own company in the U.S. Graphisoft is also in a strong position in Western Europe, some places in Asia and also increasingly in the U.S. The market is becoming increasingly global, which means a lot of additional efforts and expenditure to get a foothold in new markets, and this can be achieved more effectively by the common strategy of both companies.


Nemetschek has a broader assortment of solutions, while Graphisoft’s strength lies in solutions for architects in the design area. Nemetschek has spent a lot of years on developing solutions for the engineering market, and is also in the construction market with ERP solutions, while Graphisoft has started in this area. There are a lot of possibilities that we can better explore together not only on our existing markets but also on new markets. Everybody is talking about Asia and this will be a key region in future, especially when it comes to China, although I feel the best place to start is in India, where there are advantages, such as English being widely spoken and English is
the standard in the building industry.


In the meantime, the American markets offer us a lot of potential. After [market leader Autodesk] Graphisoft was always our next biggest competitor in the U.S where it has a very good market reputation. Graphisoft’s revenues from the U.S are in the range of €3-€4 million while Nemetschek’s U.S subsidiary posts €18 million.


AW: Do you have any overlap of customers using more than one of your three softwares, and if so, what percentage?


Nemetschek has not conducted any survey yet on this topic but we will do so in the next few months.


AW: Will Graphisoft maintain the same staff and offices?


We plan to incorporate Graphisoft in the Nemetschek Group with a high degree of operational independence. In view of this, there are no plans to change the company name or cut staff and offices.


AW: What changes can Graphisoft customers expect in their service, product development, etc?


Nemetschek will treat Graphisoft as a strategic financial interest. Graphisoft will continue to be managed as an independent organization and will retain its own identity. Therefore, there won’t be any changes in service or product development.


Acquisitions/Agreements/Alliances


The
Nemetschek Group submitted a public takeover bid to the shareholders of
Graphisoft SE. "We are offering the shareholders the equivalent of 9 euros per share. That is a fair price that adequately reflects the value of the company," says CFO and Board Spokesman Ernst Homolka. The offer of 2,273 forints (HUF) corresponds to 9 euros exactly and was submitted this Wednesday to the Hungarian Financial Authority HFSA prior to the opening of the stock exchange. The exchange supervisory authority will verify the offer in the next two weeks. After that, the shareholders will have 45 days to sell their shares. The transaction should be completed around the middle of March. The Nemetschek Group has had a majority interest of 54.3 percent in Graphisoft
since December 31, 2006.


Nemetschek North America announced that its parent company,
The Nemetschek Group, one of the leading technology groups worldwide for the design, construction, and management of buildings and real estate, and Adobe Systems Incorporated will be working together more closely to optimize document processes for architects and engineers. The two companies are consolidating their roles as technology leaders by leveraging and promoting PDF as the format of choice for the exchange of data in the building industry. Nemetschek North America has already begun by integrating Adobe PDF creation capabilities directly into its CAD software program VectorWorks 12.5, and Nemetschek AG has integrated the technology into Allplan.


Informative Graphics Corporation (IGC), a leader in content visualization, secure publishing and collaboration technology, announced that the company has formed
Avolve Software as a wholly owned subsidiary.


Avolve Software (www.avolvesoftware.com) will be dedicated to developing and marketing its ProjectDox(R) communication and process management platform to firms in the architecture, engineering and construction (AEC) marketplace. Additionally, the software gives local governments a time-saving, paperless approach to construction permitting and plan-check processes.


Eagle Point Corporation announced that it has entered into a partnership with Honkamp Krueger & Co., P.C. a top 100 CPA firm to increase the range of business consulting services it offers to its clientele.


Through Eagle Point’s years of interacting with owners of organizations, it became apparent that proactive financial planning was often taking a backseat to the day-to-day work production of a business.


Announcements


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