AspenTech still waiting on Micromine closure

Aspen Technology investors continue to play a waiting game on the company’s US$623 million mining software acquisition, Micromine, with regulatory clearance in Australia still pending. The deal, announced last July, was due to close before the end of 2022.

AspenTech has announced its second-quarter results and guidance for the balance of FY22 (to June 30 this year), but continues to hold back on providing further visibility on the contribution Micromine is expected to make while it awaits closure of the major transaction.

“We’re proceeding on our integration planning with Micromine as we work towards the completion of the transaction,” AspenTech CEO Antonio Pietri said on this week’s results call.

“We expect this acquisition to close as soon as we obtain the last remaining regulatory approval which we’re actively working to secure.

“We have become even more impressed with the Micromine team and products as we have gotten to know them better as this process has played out, and look forward to welcoming them to AspenTech.”

‘New’ AspenTech was created from last year’s $11 billion combination of New York Stock Exchange-listed Emerson Electric Co’s OSI and Geological Simulation Software (GSS) businesses with AspenTech’s legacy software activities, plus $6 billion cash and an alliance to boost AspenTech’s access to Emerson markets. Emerson would emerge with 55% ownership of the enlarged AspenTech.

The latter subsequently offered A$900 million for Micromine, owned by private equity firm Potentia Capital and founders.

Emerson agreed during the December quarter to loan AspenTech US$630m to fund the Micromine acquisition. AspenTech finished 2022 with cash and cash equivalents of $446.1m, and total borrowings of $264m.

The company reported a net loss of $66.2m on revenue of $242.8m for Q2. It said free cash flow generated in the period was $53.1m.

Full-year revenue for the current year is forecast at $1.14 billion to $1.2 billion, not including any contribution from Micromine at this stage, with free cash flow at $347-362m.

“AspenTech’s second quarter results reflected continued, strong end-market demand and the benefit of the addition of the OSI and SSE businesses to heritage AspenTech,” Pietri said.

“We made significant progress on our integration and transformation initiatives and we believe we are well positioned to deliver on our full year operational and financial objectives.

“We have created a world class industrial software company … [that can] deliver attractive growth and profitability over the long-term.”


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