Intergraph to be taken private for $1.3 billion

LOS ANGELES (MarketWatch) — Intergraph Corp., a provider of specialty software, late Thursday said it agreed to be acquired by a group of private-equity investors in a deal worth around $1.3 billion.

Following Intergraph’s
review of its standalone plan and strategic alternatives, the company agreed to the deal that will see an investor group led by Hellman & Friedmand and Texas Pacific Group pay $44 for each of its shares.

The deal represents an 18% premium over Thursday’s closing price and a 22% premium over the stock’s average closing price for the last 20 trading days.

Intergraph’s stock, which closed up 6 cents at $37.36 ahead of the announcement, jumped 15% in evening trading on the news.

Following a trading halt, shares changed hands at $42.80 in extended trading. The stock had lost just more than a quarter of its value for the year so far, and has ranged in price from $30.04 to $51.77 over the last 52 weeks.

“Our board of directors believes this transaction is in the best interests of our stockholders and underscores the significant operational and financial improvements Intergraph has made over the past three years,” Chairman Sidney McDonald said.

He said the Huntsville, Ala.-based company remains “deeply committed” to its markets and now expects to have greater flexibility.

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The company provides spatial-information management software that enables mapping and design functions for its customers, which include government agencies as well as corporations. Intergraph’s software and services are used in a range of functions such as plant design, ship construction, public safety and aerial and geospatial mapping.

Intergraph, which went public in 1981, posted a profit of $114.4 million on net revenue of $576.8 million for all of last year. The company employs around 3,400 workers in over 30 countries. Just over half of the company’s workers are employed outside of the United States.

Goldman Sachs & Co. is acting as financial adviser to Intergraph’s board, and Morgan Stanley is acting as sole adviser to the investor group. The investor group will include San Diego-based JMI Equity, a firm that focuses exclusively on the software and business-services segments, along with Hellman & Friedman and Texas Pacific, both of San Francisco.

The deal, which still needs antitrust approval, is expected to close in the fourth quarter. The transaction will be financed through a combination of debt and equity financing and Intergraph’s cash, cash equivalents and short-term investments.

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