As Mirus originally highlighted in its 2012 PLM, A Unique Window of Opportunity for Mergers and Acquisitions research, Industry-specific solutions, particularly in non-traditional PLM markets, represented a top strategic acquisition imperative for the PLM Oligopolists. The most recent example of this acquisition trend is Dassault Systemes announced $750 million dollar acquisition of Accelrys.
According to their website, Accelrys (NASDAQ:ACCL), a leading provider of scientific innovation lifecycle management software, supports industries and organizations that rely on scientific innovation to differentiate themselves. The Company’s blue chip customers traverse several science-based industries such as life sciences (medical device, pharma, biotech), consumer packaged goods and chemical/agribusiness industries.
While these non-traditional PLM industries do not have complex and lengthy bills of materials like their traditional PLM industry brethren ( Aero, Auto, Industrial), they are still spending tens and even hundreds of millions of dollars to implement PLM solutions. The life science industries are large, innovation-driven, constantly changing and represent complex regulatory environments, where penalties for non-compliance are often measured in billions not millions, as was the case with a November 2013 J&J $2 billion dollar settlement with the FDA. Beyond compliance, companies in life science industries value and invest in quality manufacturing, product and process optimization and secure collaboration, all of which are impacted by PLM.
As the Oligopolists look to fulfill both the market’s demand for improving growth rates and their prospective customers’ demand for more specialized and industry specific applications, we believe more industry-specific application providers stand to benefit (See Mergers and Acquisitions in PLM). Hopefully, you won’t be caught off guard when they come knocking because this window of opportunity has a shelf life like all trends. If you’d like to learn more about our perspective and how we help you prepare to jump through the window of opportunity when it presents itself, please give me a call. If you don’t believe us, listen to Oleg Shilovitsky, the Co-Founder of Inforbix and Senior Director at Autodesk, who was recently quoted stating,” Vertical ( or industry) specialization can become a future goldmine for PLM vendors and solution providers”.