After 36 years as a private company, Bentley Systems finally announced this September it has gone public with an initial public offering (IPO), making its shares available to the public on the Nasdaq Global Select Market available to begin trading on September 23, 2020 under the symbol “BSY.”
“Bentley,” as we know them in the AEC industry, has been providing infrastructure design solutions since 1984 that include the popular solutions MicroStation, ProjectWise and dozens of others for building, rail, roads and more.
Based in Exton, Pennsylvania, the five Bentley brothers—Greg, Keith, Barry, Raymond and Scott—built the Bentley empire which includes more than 4,000 employees worldwide and annual revenues of more than $700 million in 171 countries outside the United States.
65-year-old Greg Bentley heads the show these days as CEO. Little did we know he was not one of the founders but joined the company shortly after its inception. And it may surprise Bentley customers to learn Greg’s background is in finance (MBA from the prestigious Wharton School) and bachelor’s in the little-known field of decision sciences from the University of Pennsylvania. Before joining Bentley, he actually founded a financial trading software firm, which became part of SunGard Data Systems, Inc.
Keith Bentley, current EVP and CTO, and Barry J. Bentley, board director, were the original founders of the company while Raymond Bentley, board director, was one of the original developers; all of whom have engineering degrees.
Scott, however, is no longer involved with the company, and is the founder of VideoRay, maker of Underwater ROVs (Remotely Operated Vehicles), where he has been since 1999. More recently he became the owner of American Keg, maker of stainless steel kegs. Both companies are out of the Philly area in Pennsylvania.
The IPO has proved to be a good move so far worth as much as $8.7 billion. According to the Philadelphia Inquirer, shares of the newly public Bentley Systems opened at $22 a share on Wednesday September 23, then shot up 50% to $33.49 in its first day of trading, giving the company a total value of $8.7 billion.
This is good news for Bentley employees and the main point of the IPO, according to Philadelphia news sources. While Bentley Systems was no longer granting interviews, we found some news sources who did get to interview Greg Bentley.
The Philadelphia Inquirer stated that, “Scott Bentley and other former employees sold shares that now trade on the Nasdaq market and kept the proceeds, minus a cut for Goldman Sachs and other investment bankers. Those public shares are still just 4% of the company’s total, but that’s enough to establish a market price to value the shares given to Bentley employees to save for retirement, Greg Bentley said in an interview.”
“That is the driver and the reason” for the IPO, he added. As a business, with voting control still firmly in Bentley’s hands, “we’re just going to keep doing what we are doing.” Bentley said he hopes the successful public offering gives positive exposure to the construction and utilities engineering and infrastructure firms that are his company’s markets. “We’ve always been good at engineering,” he said. “We are doing better at marketing.”
However, even if the IPO was done with the employees in mind, Greg Bentley followed the lead of other billion-dollar family-owned firms that have gone public. One company mentioned in the article is Vertex, who sold its shares to not only to its employees, but also the public. “Bentley credited Amanda Westphal Radcliffe, the second-generation co-owner of Vertex, with giving ‘very good advice’ on how to go public and allocate shares to staff while retaining voting control for the founding family.
In the article he also mentioned how another Pennsylvania company, the analysis/simulation software giant, Ansys’ founder John Swanson grew the company before going public.
According to the Philadelphia Business Journal, “Unlike other IPOs, where a company issues new shares in order to raise cash and fuel expansion, Bentley Systems is only selling shares already owned by its more than 4,000 employees. The idea is to reward those employees with liquidity, Greg Bentley said, after they helped the company get to where it is today.” The IPO now makes every employee a stockholder of the company.
Bentley originally proposed the idea of going public back in 2002 when the company applied to the Securities and Exchange Commission (SEC) for an IPO, but backed out later in the year. In 2015 the company filed preliminary paperwork for an IPO as well.
Since then Bentley has been busy investing themselves; tinkering with new toys through lots of acquisitions and new friends like Siemens and Topcon Positioning Group and dabbling in new companies.
One partnership that has raised eyebrows is the partnership between Siemens AG and Bentley announced in 2016. Since then, there has been considerable buzz about whether Siemens would acquire Bentley. A recent article from Bloomberg reads, “Siemens AG is weighing an acquisition of Bentley Systems Inc., according to people familiar with the matter…”
Siemens, the automation giant, could easily afford it. The company reported in fiscal 2019 that they had generated revenue of €86.8 billion and made a net income of €5.6 billion. The company itself is massive with 385,000+ employees worldwide.
Since the partnership, the companies have collaborated on and introduced solutions for factory, plant and digital twins.
In August of 2018 Siemens PLM Software (now Siemens Digital Industries) introduced PlantSight digital cloud services, a joint solution to enable as-operated and up-to-date digital twins, which synchronize with both physical reality and engineering data, creating a holistic digital context for consistently understood digital components across disparate data sources, for any operating plant.
In October later that year, they followed with more solutions at Bentley Systems’ annual Year in Infrastructure (YII) event, introducing “an integrated solution for enterprises to deliver capital projects more efficiently,” combining the Teamcenter portfolio with Bentley’s ProjectWise and its Connected Data Environment (CDE). For those not familiar with PLM, Teamcenter is Siemens product lifecycle management (PLM) solution.
In addition, the companies announced an asset performance management (APM) solution for power plants. The service is hosted on Siemens’ cloud-based Internet of things (IoT) operating system, MindSphere, combined with Bentley’s asset performance software capabilities.
Getting back to the IPO for a bit, Siemens currently owns stock in Bentley. In 2018 Siemens and Bentley released a joint press release that stated, “In addition, as a result of the continuous investment of Siemens into secondary shares of Bentley's common stock the Siemens stake in Bentley Systems now exceeds 9%.” However, the Philadelphia Business Insider reported that Siemens retained a 6.1% stake in the company during the IPO.
What does the IPO mean for Bentley’s customer base? It’s very possible that it could only be a good thing as Bentley keeps doing well and as long as the stock price doesn’t tank; and they continue to make more money for investments in R&D, acquisitions and to further expand their employee base.
Bentley has certainly demonstrated grand efforts to meet the needs of its existing customers and reach new customers and markets through its partnerships, like Siemens mentioned above and bundles of acquisitions.
Another partnership worth mentioning is with Topcon Positioning Group announced in 2016. Topcon Position Group offers measurement and workflow solutions for construction and is headquartered in California.
Through the partnership Bentley offers its ProjectWise CONNECT Edition users connectivity with Topcon’s cloud-based data storage solution, MAGNET Enterprise, and Topcon incorporates ContextCapture image processing for its mass data collection via unmanned aerial systems (UAS).
In more recent news, last year Bentley and Topcon announced a jointly-owned company, Digital Construction Works, to provide digital automation, integration and digital twin solutions from Topcon, Bentley Systems and other software vendors for the construction industry.
As far as acquisitions, Bentley has picked up some cool technologies along the way including e-on Software’s Lumen RT, Synchro Software and LEGION.
Only time will tell how the IPO pans out, and if Siemens or others will attempt to acquire Bentley. I hope Bentley continues to do their own thing, because they’ve clearly been doing something right with a worth of $8.7 billion. The IPO has proved to be a good move so far.
Stay tuned for more from Bentley. Their Year in Infrastructure event takes place this month where Bentley usually announces its latest technology advancements, acquisitions and partnerships, so it will be interesting to see what Bentley’s next moves are.