ABB forming industrial IT software joint venture with Skyva

ABB (Zurich, Switzerland) announced on October 5 that it has entered a joint venture with U.S. software developer Skyva International, which supplies enabling software for collaborative commerce. ABB will pay $130 million for a 53% stake in the venture, and will transfer software engineers into Skyva as part of the transaction.

Skyva International develops Java-based software for "collaborative commerce," where systems link the business processes of suppliers, manufacturers, and customers. Manufacturers can better balance the availability and flow of raw materials from their suppliers against finished products leaving the plant. Customers can connect the entire supply chain to see what products are available, at what price, and when they can be delivered. Skyva software integrates all parts of the supply chain, including orders, transactions, and delivery commitments.

"This business has excellent growth potential, and builds on our already existing technology platforms," said Göran Lindahl, ABB's president and CEO. "Faced with dynamic markets, growing global competition and the need for eBusiness solutions, our customers increasingly demand new ways to speed up, become more efficient, and move into the digital economy."

ABB said the partnership will spark growth in its Industrial IT business, offering tailored software products linking production and transactional processes for both manufacturing and service-sector customers. The software can naturally be applied to the automotive, chemical, mining, and cement industries, to name a few. The systems are designed to complement offerings from major ERP (Enterprise Resource Planning) suppliers, allowing customers to maximize their installed ERP assets.

The joint venture will be headquartered in the United States and, pending customary approvals, begin operation immediately. It will employ well above 300 IT and eBusiness specialists in its first year of operation, and expects to take on an additional 200 software and business reengineering experts as the business grows.

ABB said it expects the joint venture to generate substantial new revenues from licensing this technology directly to customers and from delivering finished solutions through ABB's market channels. In addition, the joint venture will expand ABB's offering beyond the manufacturing sector and into service sectors, such as banking and insurance.

The parties envision taking the company public in the next few years.

For more information, contact Thomas Schmidt or Pia Irell (investor relations) of ABB at +41-1-317-7354.

Edited by Angelo DePalma
Managing Editor, Pharmaceutical Online and Drug Discovery Online
adepalma@vertical.net