Ricardo sells its software division

Ricardo, a global strategic, environmental and engineering consulting firm, recently announced that it has completed the sale of the Ricardo Software business unit comprising shares in Ricardo Software’s UK, US and Czech companies as well as assets related to FOG Software Group, a division of Constellation Software Inc (CSI).

This disposal is part of Ricardo’s refined strategy to optimize its portfolio by repositioning itself for long-term and sustainable growth in environmental and energy transition solutions. Proceeds will be reinvested in opportunities that offer attractive growth, while allowing Ricardo Software’s business to grow under different owners.

Ricardo Software is a technology partner to the world’s leading transportation OEMs and Tier 1 suppliers, providing a comprehensive suite of automotive simulation design tools for propulsion and transmission design solutions. It is in this context that Ricardo considers FOG Software Group to be ideally placed for Ricardo Software’s next stage of growth, given its STEM business portfolio, which includes CFD, visualization and software companies. analysis, and its philosophy of creating and growing the market. leading software companies. As part of the transaction, Ricardo will continue to have access to software licenses from FOG Software Group, ensuring continuity of service to its automotive and industrial customers.

The maximum cash consideration receivable is $20.5 million (Rs 162 crore). Ricardo will receive a cash flow of $17.5 million (Rs 138 crore) upon completion and this may increase by another $3.0 million (Rs 23 crore) depending on Ricardo Software achieving certain targets of revenue during the 12 month period following completion. The figures above include adjustments for cash and net working capital.

Ricardo Software generated revenue of £9.3 million (unaudited) and underlying operating profit of £1.8 million (unaudited) for its financial year ended June 30, 2022 , with gross assets as of June 30, 2022 of £11.2 million (unaudited). As part of the divestiture, management of Ricardo Software will transfer with the company and will lead ongoing activities within FOG’s STEM portfolio.

Graham Ritchie, CEO of Ricardo plc, said: “The sale demonstrates further progress in optimizing Ricardo’s portfolio. This, combined with our acquisition of Inside Infrastructure earlier this year, presents positive momentum towards our ambition to become a leading strategic consulting and engineering firm for environmental and energy transition solutions.

Main image: courtesy of Ricardo

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