The construction software industry is fragmented, and there is a growing demand for technology that will help contractors, drawing deal activity particularly from strategic buyers. One company that is active in the sector is Autodesk Inc. (Nasdaq: ADSK), which recently aquired Pype. Pype’s software helps automate construction projects. Mergers & Acquisitions spoke Sidharth Haksar, Autodesk’s director of corporate development about the Pype deal.
How does the acquisition of Pype fit into Autodesk’s M&A strategy?
Autodesk’s ongoing focus is to help construction teams meet the world’s rapidly expanding building and infrastructure needs, while making construction more predictable, safe and sustainable. Like our acquisitions of PlanGrid, BuildingConnected and Assemble, the acquisition of Pype stems from our dedicated investment in the digitization and automation of the construction industry to improve overall collaboration, quality, safety and productivity. Pype’s suite of software solutions broadens our comprehensive construction offering and automates critical project workflows across the design, planning, construction and operations phases of the building lifecycle.
How was Autodesk able to close the deal during the pandemic?
Pype has been a longstanding partner of Autodesk so we were familiar with the company, the team and its core offerings. Earlier this year we began exploring a more strategic partnership with Pype, which ultimately led to our announcing the acquisition on July 22, 2020. The current situation did not impact the terms or circumstances of our proposed acquisition.
What was the biggest challenge of the deal?
Pursuing an acquisition in the middle of a pandemic brings with it its own unique set of complexities. For instance, we had to conduct and manage the entire diligence process remotely due to travel restrictions. However, this was mitigated by having a robust internal M&A process, significant M&A experience on our team, and our prior history of working with Pype.
Is Autodesk looking for more acquisitions?
While we do not comment on any specific investment or acquisition activities, we are always evaluating build, buy and partner opportunities to accelerate our overall strategy.
What advice do you have for other companies looking to close deals under current challenges?
Be prepared for longer lead times across the M&A process. For companies being acquired, it’s critical to identify the “right” partner who can provide deal certainty and/or has the balance sheet strength to consummate the transaction. For acquirers, having prior M&A experience, existing relationships or familiarity with the companies being pursued, and the ability to adapt to new means and methods of conducting diligence (e.g., all virtual meetings) will be instrumental in delivering a successful outcome.