In an effort to broaden the compass of its supply chain management software
suite, Aspen Technology has acquired Petrolsoft Corporation, which makes
software to support downstream petroleum distribution and replenishment
operations. Aspen will exchange 2.6 million shares of common stock for
Petrolsoft in a pooling of interests transaction valued at nearly $60
million. Privately held, Petrolsoft currently has approximately 50 employees
and posted calendar 1999 revenues of approximately $4.0 million.
a relative revenue basis, Aspen is offering nearly twice as much for Petrolsoft
as it did for Chesapeake Decision Sciences, a supply chain management
software company acquired in April 1998. All evidence indicates that Petrolsoft,
a private company, is financially sound and self-funded. Aspen indicated
that it won out over other potential buyers that included some of the
leading vendors in supply chain management and process control systems.
The scope of Petrolsoft's product suite covers two primary activities,
those involved in terminal-to-retail customer and refinery-to-terminal
workflows. These segments complement Aspen PIMS crude selection and refinery
operations planning and execution capabilities. For the most part, the
combination of Aspen PIMS and Petrolsoft is a clean one, however, Aspen
MIMI does offer a toolkit for developing distribution planning capabilities.
Although this may present an overlap from a high-level functional perspective,
the two packages are apples and oranges when it comes to the details.
Aspen will likely emphasize the canned functionality for downstream distribution
afforded by Petrolsoft and reserve MIMI for cases that require extensive
acquisition will offer Aspen another product to sell to its vast customer
base in the petroleum refining industry. Aspen has a large number of adherents
among petroleum refiners for its upstream SCM functionality and its PIMS
scheduling product is used in 85% of the refineries in North America.
The effective linking of downstream and upstream operations can help petroleum
companies and their partners reduce costs inherent in transporting, distributing,
and storing petroleum products.
Users who make their business in retailing or distributing petroleum products
should not change their perception of Petrolsoft with the recent acquisition,
although few changes will be apparent in the short term. Still involved
in the initial planning stages, the two companies expect to spend six
months on the integration of PIMS and Petrolsoft, an exercise they say
will be facilitated by their similar development philosophies and environments.
First steps include developing a common database platform, one that will
rely on a combination of Oracle 7/8 and Microsoft SQL. However long it
takes, current and potential Petrolsoft users should welcome the planned
integration to Aspen PIMS as it can allow them to more easily expand the
scope of their IT-enablement in the future.