Aspen Technology, Inc. has completed a transaction to acquire ICARUS Corporation,
a maker of knowledge-based systems (KBS) to support decision-making in
a broad range of process industries including chemical, petrochemical,
specialty chemical, refining, pulp and paper, pharmaceutical, food, mining
and power industries. ICARUS applications overlap many areas of Aspen's
Plantelligence suite, especially process modeling, simulation, and design
analysis. However, ICARUS also offers applications for plant capital cost
estimation and project economics, which constitute a big win for Aspen.
Aspen will integrate the ICARUS financial decision-making tools with its
manufacturing modeling, asset optimization and supply chain offerings.
paid $24.5 million in a combination of cash and stock to acquire privately-held
ICARUS. ICARUS reported total revenues of $11.3 million and profitable
operations in its most recent fiscal year. Aspen will account for this
acquisition as a purchase, and excluding one-time charges it will be non-dilutive
in the fiscal year, ending June 30, 2001.
Aspen estimates that the process manufacturing industries spend over $300
billion each year in new capital investments, making its decision to acquire
ICARUS a sound one. Successful combination of economics and supply chain
optimization remains one of the more elusive goals of the enterprise software
industry. Historically, the two have been separate functions with plant
operations personnel responsible for process optimization and accountants
in charge of watching capital expenditures. Some separation of authority
will (and should) always exist, but there is no reason that data pertinent
to both areas should not be sourced from a common location.
for evaluating economic trade-offs in capital investments that arise from
process upgrades, new designs, and retrofits require much of the same
data as process optimization, simulation, and control with cost as the
new layer of information. It remains to be seen how closely cost data
are associated with static design data and which of ICARUS' functionality
makes its way into Plantelligence, but Aspen has shown competence in assimilating
past acquisitions and we see no reason why ICARUS should be an exception.
Aspen and ICARUS have collaborated on past implementations and the experience
should facilitate the merger.
completed integration of ICARUS will give Aspen an edge over its competition
in the process industries space as well as advancing it further than its
counterparts in the discrete manufacturing world, such as i2 Technologies
While the acquisition has good potential for synergy, process manufacturers
who may be considering a purchase should make sure that they:
the level to which ICARUS and Aspen Plantelligence will be integrated.
Often, integration of supply chain planning and financial decision-making
applications means only that both can be accessed via the same GUI window,
not that they incorporate the same data and workflows.
current methods and tools they use to evaluate financial alternatives
and compare these to ICARUS functionality.
how critical plant capital cost estimation and project economics functionality
is to their business and assign an appropriate level of importance to
this factor relative to other technology needs.