Hexagon AB, the world’s biggest maker of measuring instruments, agreed to buy Intergraph Corp. for $2.13 billion to add software that helps companies visualize complex data and design factories, ships and oil rigs.
Hexagon rose as much as 9.6 percent, its biggest gain in almost two months, and traded up 6.7 percent at 108.20 kronor as of 11:35 a.m. in Stockholm, valuing the company at 28.7 billion kronor ($3.7 billion).
The purchase will be financed through “bank facilities,” Stockholm-based Hexagon said in a statement today, adding that it will seek to raise $850 million from a share sale to existing investors after the transaction has been completed. Buying Huntsville, Alabama-based Intergraph will boost Hexagon’s workforce by more than 50 percent, adding 4,000 employees in 34 countries.
“This fits right into Hexagon’s strategy,” said Jon Hyltner, an analyst at Handelsbanken AB in Stockholm who has a “buy” rating on the shares. “They have talked for a while about wanting to do something, so it’s not a huge surprise, but this is a really big acquisition.”
Intergraph, which provides software to businesses and governments in more than 60 countries, seems to have “pretty good” profitability, Hyltner said.
Hexagon will help Intergraph boost sales in China, Ola Rollen, the Swedish company’s chief executive officer, said by phone today. “We have 14 regional offices, four factories and more than 1,500 employees in China,” Rollen said. “We’ll help Intergraph reach more customers through our sales organization in China.” Hexagon may also pursue “some smaller complementary acquisitions.”
Today’s announcement follows Hexagon’s purchase of Brown & Sharpe, Leica Geosystems and NovAtel in the past decade.
The $850 million share sale is backed by shareholders holding 53 percent of the votes, Hexagon said. It will take about three months for the acquisition to win regulatory approval, Rollen said.