- Agreement to Acquire Leading Provider of Construction Cost Data, Software and Service
- Provides Entry into the Attractive, High-Single Digit Growth Facilities Maintenance and Management Segment within the $20 Billion Total Addressable Construction Software Market
- Long Runway of Consistent Revenue Growth; Positions Fortive in Underpenetrated, Low Volatility Verticals Serving the $1.5B Segment
- Advances Fortive’s Portfolio Enhancement Strategy to Invest in Software Enabled Workflows to Increase Growth Profile while Reducing Cyclicality
- Expected to Achieve 10% ROIC in less than 5 Years
Fortive Corporation (“Fortive”) (NYSE: FTV) announced today that it has
entered into a definitive agreement with Warburg Pincus to acquire
Gordian, a privately-held, leading provider of construction cost data,
software and service. The acquisition will be subject to customary
closing conditions, including regulatory approvals, and will be financed
with available cash.
Since pioneering the industry’s first procurement platform, Gordian has
expanded into cost estimating and facility planning workflow solutions
across an extensive set of industry verticals. Gordian’s comprehensive
offerings serve the entire building lifecycle and provide workflow
solutions to optimize every stage of an asset owner’s construction and
maintenance needs, including connecting the owner and contractors in the
same exchange and providing access to cost and facilities metrics
databases via a subscription-based model.
James A. Lico, President and Chief Executive Officer of Fortive, stated:
“We are excited to acquire an industry leader in the attractive,
high-growth facilities maintenance and management segment. The pending
acquisition of Gordian advances our portfolio enhancement strategy to
invest in software enabled workflows to increase our growth profile
while reducing cyclicality.”
Mr. Lico continued, “Gordian’s over 70 years of proprietary construction
cost data and domain expertise and a seasoned management team created
the industry standard in construction task data, workflow software and
service. We look forward to working with the Gordian team to drive
continued growth, innovation and value creation for customers across the
facilities management ecosystem.”
Alex Berzofsky, Managing Director of Warburg Pincus, stated: “Gordian
has established itself as the leading provider of facility and
construction cost data, software and expertise. We have been pleased to
support the company and its talented management team as the business has
grown and filled a critical need in solving the challenges of those in
construction with technology and insights. We wish the team the best in
their next step with Fortive.”
The purchase price for the acquisition is $775 million and the
transaction is expected to close in the third quarter, 2018. Fortive
expects Gordian to generate approximately $130 million of revenue in
2018. Upon closing, Gordian will become part of Fortive’s Field
Solutions platform (comprising Fluke, Qualitrol, and Industrial
Scientific) within Fortive’s Professional Instrumentation segment.
ADVISORS
Credit Suisse served as financial advisor to Fortive. WilmerHale served
as legal counsel to Fortive.
ABOUT FORTIVE
Fortive is a diversified industrial growth company comprised of
Professional Instrumentation and Industrial Technologies businesses that
are recognized leaders in attractive markets. With 2017 revenues of $6.7
billion, Fortive’s well-known brands hold leading positions in field
instrumentation, transportation, sensing, product realization,
automation and specialty, and franchise distribution. Fortive is
headquartered in Everett, Washington and employs a team of more than
26,000 research and development, manufacturing, sales, distribution,
service and administrative employees in more than 50 countries around
the world. With a culture rooted in continuous improvement, the core of
our company’s operating model is the Fortive Business System. For more
information please visit: www.fortive.com.
ABOUT WARBURG PINCUS
Warburg Pincus LLC is a leading global private equity firm focused on
growth investing. The firm has more than $45 billion in private equity
assets under management. The firm’s active portfolio of more than 165
companies is highly diversified by stage, sector and geography. Warburg
Pincus is an experienced partner to management teams seeking to build
durable companies with sustainable value. Founded in 1966, Warburg
Pincus has raised 17 private equity funds which have invested more than
$68 billion in over 820 companies in more than 40 countries. The firm is
headquartered in New York with offices in Amsterdam, Beijing, Hong Kong,
Houston, London, Luxembourg, Mumbai, Mauritius, San Francisco, São
Paulo, Shanghai and Singapore. For more information, please visit www.warburgpincus.com.
FORWARD-LOOKING STATEMENTS
Statements in this release that are not strictly historical, including
statements regarding the proposed acquisition, the anticipated timing
and terms of the acquisition, future financial impact or results of the
acquisition, the anticipated prospects of Gordian or the industry
following the acquisition, future growth opportunities following the
acquisition, future cyclicality, and any other statements regarding
events or developments that Fortive expects or anticipates will or may
occur in the future, are “forward-looking” statements within the meaning
of the federal securities laws. There are a number of important risks
and uncertainties that could cause actual results, developments and
business decisions to differ materially from those suggested or
indicated by such forward-looking statements and you should not place
undue reliance on any such forward-looking statements. These risks and
uncertainties include, among other things, the ability of the parties to
satisfy the conditions to the acquisition on a timely basis, the
parties’ ability to complete the acquisition on the anticipated terms
and schedule, including the ability to obtain regulatory approvals,
deterioration of or instability in the economy, international trade
policies, and the financial markets, contractions or lower growth rates
and cyclicality of markets Fortive or Gordian serves, competition,
changes in industry standards and governmental regulations, Fortive’s
ability to successfully integrate and realize the anticipated value of
Gordian’s operations, the ability to realize anticipated growth,
synergies and cost savings, and Gordian’s performance and maintenance of
important business relationships pending closing of the acquisition.
Additional information regarding the factors that may cause actual
results to differ materially from these forward-looking statements is
available in our SEC filings, including our Annual Report on Form 10-K
for the year ended December 31, 2017 and our Quarterly Report on Form
10-Q for the quarter ended March 30, 2018. These forward-looking
statements speak only as of the date of this release, and Fortive does
not assume any obligation to update or revise any forward-looking
statement, whether as a result of new information, future events and
developments or otherwise.
With respect to the non-GAAP forwarding-looking projections on “ROIC,”
Fortive is unable to provide a quantitative reconciliation to the most
directly comparable GAAP measure because the items that would be
reconciled are inherently difficult to predict and estimate due to their
unknown timing, effect and/or significance.
Lisa Curran
Vice President, Investor Relations
Fortive Corporation
6920 Seaway Boulevard
Everett, WA 98203
Telephone: (425) 446-5000