ABB Seeks Stake in Energy Management Software with $1 Billion Deal for Ventyx

ABB Group, Zurich, Switzerland, said it has agreed to buy Ventyx, an Atlanta-based software provider specializing in systems to manage energy networks, for more than $1 billion. The move adds a leading provider of asset management, mobile workforce management, energy trading and risk management, energy operations and energy analytics for the energy, utility, communications and other businesses to ABB’s already considerable presence in the utility sector.

ABB will combine the network management business in its Power Systems division with Ventyx to form a single unit for energy management software solutions. Ventyx provides ABB with broader access to the utility enterprise management market, trebling the energy management software market available to ABB, according to an ABB release.

“The big advantage for energy companies, utilities and industrial customers is that they will now have a single supplier of enterprise-wide information technology platforms and power automation systems,” said Joe Hogan, ABB’s CEO. “The advantage for our shareholders is a cash-generating acquisition in an exciting growth market, with a strong management team, a highly complementary offering and geographic scope, and an attractive return on capital employed.”

Ventyx has a large installed base in the U.S. market and Europe and operates in more than 40 countries. The company employs 900 people and reported 2009 revenues of about $250 million. It was owned by Vista Equity Partners, San Francisco.

The acquisition is part of a strategy in which ABB is pursuing growth opportunities that complement its product, technology and geographic portfolio. It’s subject to customary regulatory approvals, and ABB expects the transaction to be completed in the second quarter. ABB intends to pay for the acquisition in cash.

One of Ventyx’s key software applications gives utilities and grid operators the information they need to better match electricity generation with consumption, even at the household level. By generating real-time information on electricity demand, pricing and availability, Ventyx’s software enables a practical business model for utilities to generate revenues from smart grids and from trading carbon credits.

Ventyx’s load forecasting software can also help integrate large amounts of unpredictable renewable energies, such as wind and solar power. The company provides other asset management applications to fully integrate a utility’s business and enterprise systems across the entire value chain, and a comprehensive service suite to facilitate efficient resolution of network failures.