US-based Bentley Systems continues to accumulate mining software companies, this week adding Canada’s Minalytix to the Seequent business for which it recently outlaid US$1.05 billion in cash and shares.
Nasdaq-listed Bentley (BSY) said Minalytix and its MX Deposit mineral exploration software extended Seequent’s “cloud capabilities and solutions for mining, including greenfield exploration, resource development, and mining production”.
“Drill and sample data are the lifeblood for mining companies when exploring, and MX Deposit naturally aligns with our mining and exploration portfolio, including newly acquired geoscientific imagery platform Imago,” Seequent CEO Graham Grant said.
Seequent previously had a minority share of Minalytix.
It’s another small piece in a seemingly larger Bentley mining and minerals information technology play.
Mining/minerals accounted for about 75% of Seequent’s circa-US$90 million of annual recurring revenues prior to the Bentley acquisition. It has added Denmark’s Aaarhaus GeoSoftware (AGS), Phoenix, Arizona-based Imago and now Minalytix in the three-month window since the Bentley-Seequent deal closed.
Ahead of a meaningful contribution by the Seequent business, Bentley recently posted June-quarter revenues of US$222.9 million (up 21% year-on-year) and 12-month trailing recurring revenues of $746.2m (up 12.1% yoy).
“A highlight for us this quarter has been the inclusion of Seequent, and subsurface digital twins, into our company and into our new financial outlook,” CEO Greg Bentley said.
“Our updated financial outlook for the full year 2021 contemplates surpassing the milestones $1 billion in revenue, double-digit ARR growth even exclusive of Seequent and, importantly, maintaining our 32% adjusted EBITDA margin target for 2021 while absorbing at the same time our incremental investments in growth initiatives, our incremental public company operating costs, and our increasing pace of programmatic growth acquisitions, along with the financially material acquisition of Seequent.”
Analysts heard on a call after Bentley announced its latest results that the new Seequent arm of the company was growing twice as fast as the rest of the business. CFO David Hollister said on the call: “We’re seeing that, and that’s confirmed … We’re going to keep investing in that business to fuel that continued growth.”
Greg Bentley said the company saw significant upside potential for Seequent in civil and other markets. It also believed much of Seequent’s mining client base had little exposure to the rest of Bentley’s portfolio, presenting fresh opportunity.
“Mining is a great business, as important as it is now for the world’s electrification”
“My observations are everything below ground is going from 2D to 3D, and you can only do that with the geosciences portfolio in Leapfrog. So that’s a one-time, but continuing, momentum,” Bentley said. “Mining is a great business, as important as it is now for the world’s electrification. And then, we have the opportunity for these synergies in infrastructure and environmental. So, I think our expectations [around growth] should be high.
“We are witnessing a substantive shift globally in energy consumption patterns and changes to how countries and societies view energy. It’s worth mentioning that the world’s electrification depends on a massive renaissance for mining. Seequent supports this in conventional mining, of course, and in some less conventional sources. For example, extracting lithium from high-temperature geothermal fluids from underground.”
Bentley chief product officer Nicholas Cumins believes the company is building a competitive edge in sub-surface risk management technology beyond the minerals market. “Studies have shown that unexpected problems related to ground conditions account for more than a third of project overruns,” he says. “But imagine if you could see what lies beneath. You could de-risk project delivery. You could greatly increase the resilience, the sustainability of the infrastructure. Seequent translated algorithms that originated in medical sciences into geology to create a paradigm shift in how the subsurface is interpreted. This capability, honed-in the minerals industry where Seequent is very strong today, has gone on to evolve into multiple industry verticals.”