Acquisition of Viewpoint by Trimble Aims to Extend Construction Management Offering

At Portland headquarters, Manolis Kotzabasakis, Chairman and Chief Executive Officer delivers news of the planned acquisition.

Mark Sawyer, director of construction industry strategy at Trimble and Manolis Kotzabasakis, CEO of Viewpoint, spoke of the recent definitive agreement entered into by the two companies for Trimble to acquire Viewpoint from Bain Capital in an all-cash transaction valued at $1.2 billion.

Viewpoint is highly complementary to Trimble’s e-Builder business (Trimble recently acquired e-Builder). For those unfamiliar with Viewpoint, the company is a leading provider of scalable construction management software which integrates a contractor’s financial and resource management information to their projects operations and to their jobsite and field.

“e-Builder has been very focused on program management requirements for the owner community both public and private sector owners, while that focus will be extended into project management from other components of the project team,” said Sawyer. “That owner focus brings with it healthy business on projects, and Viewpoint has three main constituents as their customers: General contractors (GCs) for sure but a very large number of building subcontractors and civil contractors. So when you look at the mix of the two from a go to market standpoint, e-Builder has been very focused on owners and Viewpoint has been very focused on the contractors on the execution side out in the field. They are very complementary and from a product standpoint both have some project management and collaboration capabilities. We plan to leverage the two together. It’s a great customer count, there’s collectively hundreds of billions of dollars of construction in North America under management by the two by their tools. And I think we’ve already shown numbers in Viewpoint with 8,000 customers and a very large fraction of those focused on the contractor execution side of the project.”

Customers include mid-market, meaning a mid-to-large subcontractor or mid-market GC.

e-Builder is SaaS only. Viewpoint has been in business for 40 years, and so there is a legacy of on premise installation for Viewpoint but they are aggressively migrating to the cloud now, according to Sawyer. Kotzabasakis says that the ERP product is now fully cloud-based for project collaboration, time collection, equipment management and more.

Kotzabasakis also says that Viewpoint has been accelerating their internal ERP product for the past seven to eight years. As a company, after the acquisition, they will remain Viewpoint, a Trimble Company, with no changes to their offices or employees.

Sawyer said that Viewpoint is “a very strong company, with strong execution, solid financials and the integration into Trimble will most likely be at the technology level.” That integration will fully support the existing product line.

There are a number of customers that Viewpoint and Trimble hold in common. At this time, they are not sure how many.

There is a common vision between Trimble and Viewpoint. Viewpoint talks about their focus as

• Office
• Team
• Field

The common vision for both companies includes the SaaS model as well as the move to the cloud. Viewpoint was focused on back office solutions for many years for job costs, project accounting and ERP resource management.

They have now extended it to the team and the field with collaboration project management tools.

Trimble has been linking design solutions to a team and field collaboration system, with a subcontractor in civil engineering for years, plus machine control systems out on heavy equipment on the site.

“Those systems are tied to a back office communication via the cloud,” said Sawyer. “We’ve formally called it the Trimble Connected Community but we’re going to be revamping that in the future. The idea of the systems in the office for planning and tracking being connected with the team in the field who are executing and laying out the project. Viewpoint was already implementing that on their own before we got together with them.”

Trimble and Viewpoint has work to do to integrate their two technologies. The same type of process of integration had to take place when Trimble acquired e-Builder.

Trimble’s suite of products will be served well by the addition of Viewpoint. Over the years, Trimble has addressed pieces of the contractor’s problem, namely, resource management in the form of crew planning, tracking and procurement, invoicing, tracking job costs, invoicing the general contractor. “But we have not addressed it as holistically as Viewpoint,” said Sawyer. “That’s their forte and that’s where we will be expanding that.”

Interesting that so many names from that construction project management software era have resurfaced, or have been morphed into other companies. Viewpoint acquired Dexter & Chaney, not so long ago, bringing on board their resource management lines for ERP and job cost tracking, combining their Vista and Dexter’s Spectrum. which both go on and be the focus for that solution.

Sawyer said the mid-market customers have a ready opportunity to integrate more because they don’t have many offices dotted across the country. They mostly have a mechanical subcontractor in Los Angeles or somewhere, so getting everyone on an integrated system is not so difficult.

Voluminously describing a resource management system of today, Sawyer calls it “an SaaS deployment of a resource planning and management system tied to a field based project management collaboration in the field system coupled with today’s budding growth of IoT sensors monitoring everything in the field. We think the whole resource management issue is a big one and most important is getting status of our data in the field. We can say ioT bottom line is understanding progress you’re making on your project on a granular level. This is a resource level of resource management planning and progress monitoring that hasn’t been easy in the past.”

From company materials:

Timing and Approvals

The transaction, which is expected to be completed in the third quarter of 2018, is subject to regulatory approvals, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, as well as other customary closing conditions.

Financial Overview

The all-cash purchase price of $1.2 billion is expected to be funded through a combination of cash on hand and new indebtedness. In connection with the acquisition, Trimble obtained $1.2 billion committed bridge financing, subject to customary conditions, from JPMorgan Chase Bank, N.A., Goldman Sachs Bank USA and Bank of America, N.A. Trimble is committed to maintaining an investment grade rating and expects to rapidly reduce its leverage by limiting additional acquisitions and temporarily suspending share buybacks.

Trimble expects Viewpoint to contribute approximately $200 million of non-GAAP revenue in 2019 with operating cash flow of greater than $50 million and non-GAAP operating margin exceeding 20 percent. Including interest expense, the acquisition is expected to be accretive to Trimble’s operating cash flow in 2019. Trimble expects the acquisition to be slightly dilutive to non-GAAP net income per share in 2019 due to estimated interest expense, and accretive to non-GAAP net income in 2020. All non-GAAP figures discussed exclude the impact of fair value accounting of Viewpoint’s deferred revenue.

The Viewpoint business will be reported as part of Trimble’s Buildings and Infrastructure Segment.

Tags: 3D, AEC, collaboration, construction, design, e-Builder, engineering, Trimble, Viewpoint

Categories: 2D, 3D, AEC, AECCafe, apps, collaboration, construction, construction project management, Dexter & Chaney, engineering, IFC, infrastructure, integrated project delivery, Internet of Things, IoT, project management, Trimble

This entry was posted on Thursday, April 26th, 2018 at 7:45 am. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.