By Mike Boyer
The Cincinnati Enquirer
Electronic Data Systems Inc.'s agreement to sell its engineering software unit to a trio of investment firms could open the door to relocating the business' headquarters to Milford.
Plano, Texas-based EDS said Monday it agreed to sell its UGS PLM Solutions unit, which employs more than 600 in the Park50TechneCenter, to the investment firms for $2.05 billion. The Milford site is the software unit's biggest installation.
"Everybody here (in Milford) is pretty excited about the acquisition," said Bill Carrelli, vice president of strategic marketing and business development for UGS PLM Solutions.
UGS PLM is one of the biggest players in product lifecycle management software.
Product lifecycle management - or PLM - is used by automakers and a range of other manufacturers. The software integrates a company's business systems to manage a product's life cycle from design to manufacture to deployment to final disposal. Experts say it goes a step beyond so-called "lean" manufacturing by identifying key issues to better satisfy customers while getting products to market faster, speeding factory production and cutting costs.
The global market for product lifecycle management software and services is expected to be more than $14.5 billion by 2008, according to CIMdata, an industry research firm.
Bain Capital, Silver Lake Partners and Warburg Pincus each will have an equal share of UGS PLM Solutions, which employs 5,000 worldwide and had net earnings of $104 million on revenue of $897 million last year.
"We see this as an opportunity to discuss with the new ownership ways to bring the headquarters here," said John Melvin, interim president of the Clermont Chamber of Commerce.
Nick Vehr, vice president of economic development for the Greater Cincinnati Chamber of Commerce, said, "We're always promoting opportunities to consolidate headquarters in the region."
He said the chamber has provided EDS with information about the advantages of a headquarters here and will now accelerate its recruiting efforts.
Not only is Milford the largest employee concentration for the company, it includes some software development, marketing, finance and legal support staff.
John Clendening, spokesman for UGS PLM Solutions, said no decision has been made about where the company will have its headquarters. UGS PLM Solutions now has a corporate staff of about 50 at EDS' headquarters in Plano. He said the company could decide to keep its headquarters there.
Tony Affuso, president of UGS PLM Solutions, will remain president and CEO.
The deal for UGS PLM Solutions, which makes software that helps companies design products and manage data, is the largest private equity investment in a technology company, the firms said.
EDS, which has been under investor pressure to focus on its computer outsourcing business and reduce nearly $5 billion in debt, announced last fall it was considering selling or spinning off the business. The sale should be completed within 90 days, EDS said.
EDS created UGS PLM Solutions after acquiring the former Structural Dynamics Research Corp., one of Ohio's fastest-growing public companies, in 2001. EDS then merged it with its Unigraphics Solutions unit.
UGS PLM Solutions employs about 500 in Cypress, Calif., and another 400 in St. Louis, former headquarters for the Unigraphics business. It also employs about 500 in southeastern Michigan, where it supports software for various automakers.
About UGS PLM Solutions
Business: Provides computer-aided design and data management software and services to businesses.
Financials: Net income of $104 million on revenue of $897 million.
Employees: 5,000 worldwide, including more than 600 in Milford's Park50 TechneCenter.
CEO: Tony Affuso.
Headquarters: Plano, Texas.
History: Created by Electronic Data Systems Corp. after it acquired the former Structural Dynamics Research Corp. and merged SDRC with EDS's Unigraphics Solutions unit.
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