Spectris plc (SXS: LSE), the expert in providing insight through precision measurement, today announces the acquisition of Concurrent Real-Time (‘Concurrent-RT’), from Battery Ventures, a Boston-based PE firm, for a purchase consideration of $166.7 million (£121.2 million) in cash, subject to customary closing conditions. The transaction is in line with Spectris’ strategy to make synergistic acquisitions to enhance and grow its platform and potential platform businesses. Concurrent-RT will be integrated into HBK.
Headquartered in Pompano Beach, Florida (USA), Concurrent-RT is a leading developer and supplier of real-time operating systems (‘RTOS’) for hardware-in-the-loop (‘HiL’) simulation applications, especially for aerospace, defence and automotive customers. Concurrent-RT’s RTOS hardware and software solutions are used for testing critical systems to ensure they work correctly within real-time applications and are already used by HBK to power its VI-grade simulators.
In HBK’s technology-driven industries, there is a growing demand from customers for more realistic simulation to help bring higher quality products to market faster and at lower cost. The acquisition of Concurrent-RT significantly strengthens HBK’s current and future simulation offerings and is a further step in building a position of scale in the high growth, rapidly developing and exciting simulation market. The combination also positions HBK and Concurrent-RT to meet a currently unmet market need by combining HiL features with driver-in-the-loop systems – a turnkey solution customers are increasingly demanding and are unable to source today.
For the year ending 30 June 2021, Concurrent-RT’s revenues are expected to be $42 million, with a CAGR of 6% pa since 2018, and an expected EBITDA of $10.4 million. We expect the rising demand for simulation to continue to drive growth as a result of the enhanced customer offering, leveraging both Concurrent-RT and VI-grade technology and expertise. Combining Concurrent-RT’s and HBK’s respective strengths in aerospace and defence and automotive and leveraging HBK’s sales channels will help accelerate further growth.
In line with the Group’s capital allocation policy, the returns profile is expected to meet our cost of capital by the end of the third full year post acquisition. Following this transaction, the Group is still in a net cash position with further balance sheet capacity for M&A activity and will continue the £200 million share buyback programme which is currently underway.
The transaction is subject to customary completion conditions and regulatory approvals, with completion expected to take place in the second quarter of 2021.
Andrew Heath, Chief Executive, said: “We are delighted to welcome the Concurrent Real-Time team to our HBK platform. Simulation is a key strategic growth area for HBK and Concurrent-RT brings complementary technology to strengthen and expand our virtual testing solutions. Concurrent-RT has demonstrated superior technical performance, strong revenue growth and consistent profitability that will serve us well in building a market-leading position in simulation software and simulator solutions.”
For and on behalf of Spectris plc
LEI Number: 213800Z4CO2CZO3M3T10
About Concurrent Real-Time
Concurrent Real-Time is a leading provider of high-performance real-time computer systems, solutions and software for commercial and government markets worldwide. The Company’s RedHawk™ Linux® solutions deliver hard real-time performance for the most sophisticated X-in-the-Loop simulation, high-speed data acquisition, process control and low-latency transaction processing applications. Through support of NVIDIA® Jetson™ platforms, RedHawk Linux is also ideally suited for complex real-time CUDA® applications.
With over 55 years of real-time expertise, Concurrent Real-Time‘s solutions enable customers to gain the competitive edge and reduce costs by accelerating innovation and reducing time-to-market. Headquartered in Pompano Beach, FL, the Company provide sales and support from offices throughout North America, Europe and Asia, and is part of HBK’s Virtual Test Division.
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