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UPDATE 3-UK software provider Aveva buys OSIsoft for $5 bln as Softbank cashes out

* Aveva, California-based OSIsoft both provide industrial software

* Deal to be funded in part by $3.5 bln proposed rights issue

* Aveva says deal will step up its role in digitisation of industry

* Aveva shares up 5.9% (Adds details on Softbank’s and Mitsui’s stake, updates shares)

Aug 25 (Reuters) - British industrial software provider Aveva Group is buying SoftBank-backed peer OSIsoft for an enterprise value of $5 billion, it said on Tuesday, as it seeks to expand its services with the California-based firm’s PI system.

The deal will see Japanese tech conglomerate Softbank - which has embarked on an asset sales plan - sell its 44.7% stake in OSIsoft for more than $2 billion in cash, James Kidd, deputy CEO and CFO of Aveva, told Reuters in a phone interview.

As industrial companies have been incorporating more software into their manufacturing to cut costs and improve their supply chains, providers such as Cambridge-based Aveva are growing their businesses.

Aveva said it plans a rights issue amounting to about $3.5 billion to help fund the purchase of OSIsoft, which makes software that captures data from ships, chemical boilers, power plants and other facilities in industries including oil and gas, mining, pulp and paper and water.

Shares in Aveva, a FTSE 100 company, were up 5.9% by 1026 GMT on news of the deal.

“The acquisition of OSIsoft ... will accelerate the Enlarged Group’s role in the digitisation of the industrial world, which is being driven by a need for sustainability, the industrial internet of things, Cloud, data visualisation and artificial intelligence,” Aveva’s CEO Craig Hayman said.

He described OSIsoft’s PI system, which collects, analyses and shares data from multiple sources, as “one of the most coveted businesses in the industrial sector”. It will be established as a business unit of the enlarged company, Aveva said.

Aveva’s last major deal was three years ago when France’s Schneider Electric took a 60% stake in the company.

Aveva said Schneider Electric has committed to vote in favour of the OSIsoft deal and take part in the rights issue.

The British company said it would fund the acquisition using a combination of rights issues, cash on balance sheet and new debt, as well as issue shares to one of OSIsoft’s shareholders, Estudillo.

The deal is expected to close at the end of the year.

Aveva’s profit rose 22% in the year to March but its share price fell 5.5% this year by Monday’s close after it warned in April that its performance in the first half of this financial year would be hit by the global economic downturn.

OSIsoft’s founder and CEO J. Patrick Kennedy will be appointed to a newly established role of chairman emeritus, Aveva said.

Kennedy’s Estudillo has a 50.3% stake in OSIsoft, while SoftBank holds 44.7% and the remaining is held by Mitsui & Co .

Mitsui said it will sell its interest in OSIsoft for $250 million.

Lazard was the sole financial adviser to Aveva.

[BREAKINGVIEWS-SoftBank wins most in $5 bln industrial-data M&A] (Reporting by Yadarisa Shabong in Bengaluru; Editing by Anil D’Silva and Susan Fenton)

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