TECHNIA, one of Dassault Systèmes’ global partners, announced last week that it is acquiring Claytex Services, a British-American player in advanced simulation with more than 20 years of experience in vehicles, motorsports, aviation and defense, industrial equipment, energy and the process industry.

This deal comes as no surprise. TECHNIA has a history of being one of the market's more proactive players in simulation and analysis; as recently as September last year they bought the Polish CAE company BudSoft. Prior to that, TECHNIA made at least three major investments purchasing CAE expertise and software to help build up its Simulation Center of Excellence. Specifically, at the end of 2018, the company completed acquisitions of UK-based Strategic Simulation & Analysis (SSA), and Dutch SIMULEON. Both are known as specialists in Dassault's CAE portfolio, the SIMULIA suite. Moreover, in late 2020 they bought Scanscot Technology, a leading Nordic player in advanced simulation and a reseller of SIMULIA.

These acquisitions, along with last week's announcement, reflect strong market needs related to digital simulation competence, software and support.

According to the analyst CIMdata, over the past five years revenues from the world's companies in simulation & analysis software and related services have increased from just over $5.3 billion in 2016 to 2020's estimated figure of just under $7.5 billion. It is also clear that the future looks even brighter: as of 2025, CIMdata predicts that investments will be just over $12 billion.

The 2021 results are not yet ready, “but it is certain to be over $8 billion,” says Stan Przybylinski, VP of CIMdata.

TECHNIA's consistent investment in building a broad Simulation Center of Excellence therefore looks like a very wise step.

“The Claytex team is at the forefront of simulation and digital twin technology that enables complete system simulation of vehicles, equipment and buildings,” commented TECHNIA’s CEO, Magnus Falkman.

No purchase price is revealed.

Satisfied with last week's deal in the PLM world. On the left, TECHNIA’s CEO, Magnus Falkman, and on the right, CEO of the now-acquired British-American simulation & analysis company Claytex Services. The acquisition strengthens and expands TECHNIA's offering as a global provider of premium simulation software, services, training and support through the TECHNIA Simulation Center of Excellence. In terms of ownership, TECHNIA is part of Addnode Group, whose net sales for the rolling 12-month period from October 2020 to September 2021 landed at almost $430 million, where TECHNIA’s net sales were just over $130 million.

Claytex is an engineering consultant and supplier of simulation tools. It specializes in systems technology and delivers solutions and services to customers in several industries. Notably, Claytex has a number of customers in Formula 1 motorsports, NASCAR and IndyCar who compete using solutions developed by this British-American CAE player.

Highly Specialized in Dassault’s Dymola Solutions

The background of the deal is that Claytex has been a partner of Dassault Systèmes for over a decade. In terms of software, they offer the entire series of Dymola products together with expert training and support.

Claytex also has a long-term partnership with TECHNIA's British subsidiaries and is considered to be successful in generating IP on the basis of its solid competence. The industry- and domain-specific simulation libraries, related to Dymola, are marketed and sold as Claytex products by both Dassault Systèmes and Claytex.

Dymola is a complete tool for modeling and simulation of integrated and complex systems for use within automotive, aerospace, robotics, process and other applications. It helps to rapidly solve complex multi-disciplinary systems modeling and analysis problems. Dymola is a complete environment for model creation, testing, simulation and post-processing.

In Dymola, the Modelica language is used to define models. This means that you are free to create your own model libraries or expand from the existing Modelica libraries to speed up development times, reduce maintenance efforts and improve the level of reuse across projects.

A portfolio of multi-domain libraries covering the domains of mechanical, electrical, control, thermal, pneumatic, hydraulic, drive ropes, thermodynamics, vehicle dynamics and air conditioning domains can be linked together to form a single complete model of the system.

“A Unique Competence”

Dymola is used by companies that are active in many industries, including vehicles, aviation, architecture, motorsport, energy and high technology—a perfect match for Claytex.

The solution supports the Functional Mock-up Interface (FMI) standard for import and export of models. This is a free standard that defines a container and an interface to exchange dynamic models using a combination of XML files, binaries and C code zipped into a single file.

In this context, Dymola supports FMI 1.0 and 2.0 for both model change and co-simulation. In addition, Dymola supports real-time simulation on a wide range of Hardware-in-the-Loop (HiL) platforms. An HiL simulation is a technology used in the development and testing of complex built-in real-time systems. For example, an HIL simulation platform for the development of anti-lock braking systems for vehicles may have mathematical representations for each of the following subsystems in the plant simulation:

Vehicle dynamics, such as suspension, wheels, tires, roll, pitch and yaw.
Dynamics of the hydraulic components of the braking system.
Road properties.

“Claytex has unique competence in the area of dynamic simulation in the DYMOLA environments, something that will strengthen the complete simulation offer of TECHNIA and make us a true virtual twin partner,” commented Falkman, adding, “Claytex is a team of roughly 15 simulation experts serving advanced customers ranging from top performing motorsport teams to datacenters.”

In the September 2021 event, CIMdata’s PLM Road Map & PDT 2021, Stan Przybylinski, VP of CIMdata, presented the PLM marketplace for 2020 and respective sub-areas part of the “PLM-pie.” The market grew by 3.8 percent and approached $53.5 billion. Simulation & Analysis stood for 14 percent of the total PLM investments.

How Should the Acquisition Be Valued?

As noted above, the simulation & analysis market is growing steadily and can be considered to have very good future prospects.

In total for 2020, according to CIMdata, CAE investments in simulation & analysis software alone account for about 14 percent of the total PLM investments, which means that more is invested in simulation & analysis than in collaborative Product Definition management (cPDM), and about the same amount as is invested in MCAD software.

In reality, only the Electronic Design Automation (EDA) tools have a larger share of the total among the sub-PLM tools, with 21 percent of the PLM total. In itself, this is also a reflection of the fact that product development work increasingly includes growing portions of electronics and software.

In addition to the purely technical advantages of things such as function tests, validations, performance tune up, process optimization, safety improvement, theory testing, and staff training, there is strong financial and business logic behind investments in these same areas, where simulation & analysis plays one of the main roles on the design side.

However, it is also worth mentioning that simulation still has a huge potential growth market both on the manufacturing side and with the products in the hands of end customers. In manufacturing, there are several easy-to-understand gains based on the idea that with simulation it is easier and less costly to manage, make changes and optimize the production in a digital model of the manufacturing line than to do it physically on the shop floor. In terms of end-user simulation, for example, think only of solutions for optimizing pump flows or handling autonomous vehicles.

Of course, there are plenty of other examples, but the conclusion leads to bright future prospects for both CAE software and simulation service competence.

How is this mirrored in TECHNIA’s customer base and in terms of demand?

“We see that the demand for simulation, and for more integrated simulation processes and tools supporting this, is increasing in our customer base. For us, this is one of our fastest growing segments and we believe it will continue to grow in the years to come,” asserts Falkman.

Simulation And Digital Twins

In summary, and in light of the market background above, the acquisition of Claytex strengthens and expands TECHNIA's offerings as a global provider of premium simulation software, services, training and support through the company’s Simulation Center of Excellence.

In addition, as TECHNIA noted in their own press release, "it strengthens the company's ability to perform simulation of autonomous vehicles based on Claytex's own software products in combination with 3DEXPERIENCE DYMOLA and the rFpro platforms."

In particular, Falkman points to the value of the Claytex team's capabilities in simulation and digital twin technology.

“The team is very innovative and has successfully packaged its knowledge in a software suite for various industries and domains that can now benefit our global team and increase our technical reach.”

A great example of advantages that Claytex brings to the table is in automotive, where it can take months to carry through on hundreds of individual real-life test track sessions. By creating virtual versions of those tests, you can run through a complete suite of tests practically overnight. To ensure transferability of results, Claytex can create highly realistic digital twins of real-life locations.

“Together, this merger will strengthen their ability and commitment to the virtual twin market opportunity,” claims John Kitchingman, Dassault's head of the EuroNorth division.

A Passion for Innovation

Of course, it is not a bad thing that both companies are affiliated with Dassault Systèmes as partners, and thus in a sense share the same "programmatic" and corporate cultural background. This is something that Claytex's CEO, Mike Dempsey, particularly emphasizes.

“Of course, we have a long relationship with both TECHNIA and Dassault Systèmes. Our technology and knowledge in advanced simulation will now be available for the global markets, and as part of a listed company we will have stability and capacity for further investments in our team, technology and growth,” he says. “We also share a passion for innovation with TECHNIA, which helps our customers create better performing and more sustainable products with the help of advanced simulation.”

John Kitchingman, head of the EuroNorth division at Dassault, is also pleased with how the development is playing out.

“I am pleased to see both TECHNIA's and Claytex Services' growth ambitions, and that both of these strategic partners of Dassault Systèmes merge. Together, this will strengthen their ability and commitment to the virtual twin market opportunity, and thus support and innovate with our customers very well,” he concluded.