Arrowpoint Advisory has advised Ricardo plc, the global strategic, environmental, and engineering consultancy company, on the sale of its Ricardo Software business unit to FOG Software Group, a division of Constellation Software, Inc.
Listed on the London Stock Exchange, Ricardo calls upon over 100 years of engineering excellence and employs close to 3,000 employees in more than 20 countries. The group’s global team of consultants, environmental specialists, engineers and scientists support customers to solve the most complex and dynamic challenges to help achieve a safe and sustainable world.
The divestment forms part of Ricardo’s sharpened strategy to optimise its portfolio as it repositions itself for long-term and sustainable growth in environmental and energy-transition solutions. The proceeds will be reinvested into opportunities that offer attractive growth, whilst allowing the Ricardo Software business to grow under different ownership.
Ricardo Software is a trusted technology partner to the world’s leading transport OEMs and Tier 1 suppliers, providing a full suite of automotive simulation design tools for propulsion and transmission design solutions. FOG Software Group is ideally placed for Ricardo Software’s next stage of growth, given its STEM portfolio of businesses, which include CFD, visualisation and analysis software companies, and its ethos of building and growing market-leading software businesses.
Ricardo Software generated revenue of c.£10m and underlying operating profit of c.£2m in the year to 30 June 2022 after adjusting for the impact of intercompany transactions with the rest of the Ricardo Group. As part of the disposal, Ricardo Software’s management will transfer with the business and lead the ongoing business within FOG’s STEM portfolio.
Mike Bell, Chief Strategy & Digital Officer at Ricardo plc added: “The Arrowpoint Advisory team were crucial in delivering this successful outcome. Their knowledge and expertise across both software and carve-outs was vital in unlocking value. It has been a pleasure working with their diligent and professional team.”
Ian Guilfoyle, Director at Arrowpoint Advisory concluded: “Ricardo Software sits at the heart of many of the world’s largest automotive group’s engineering roadmaps for transitioning to electric vehicle technologies. We are delighted to have advised Ricardo on this transaction and to have found a strategically-aligned home in FOG Software Group.”