Architecture software developer Nemetschek sees potential for $2.9 billion in acquisitions
"With our balance sheet strength, and a possible capital increase if required, we would have the strength to invest between 2.0 and 2.5 billion euros in takeovers," Padrines said in an interview.
"We are looking at everything in the Planning and Design and Build and Construct segments," he added, saying that the bigger acquisitions would fall under the latter, while Planning & Design would see smaller deals.
Nemetschek generates around 42 per cent of its revenue in the U.S. but Padrines played down worries over President Donald Trump's tariff and migration policies.
"There are no tariffs on software," he said.
In July last year, Nemetschek, which rivals NASDAQ-listed Autodesk in architecture software, acquired U.S. software developer GoCanvas for around 700 million euros, the largest acquisition in its history.
The purchase is still putting pressure on margins, but Padrines believes that is about to change: "GoCanvas will adjust to our margin level over the years, so we expect an EBITDA margin in the 30s in the coming years," said Padrines. Last year, it was at 30.2 per cent.
With its 14.6 billion euro market cap, the company is seen as a candidate for trading on the country's leading index DAX.
Padrines expects the company to grow sales at an average rate of around 15 per cent in the coming years, more than the broader construction software market, which is expected to grow by just under double digits.
"The construction industry offers huge potential. I used to say that only fishing and hunting are less digitalized than the construction industry. In the meantime, digitalization has even progressed in fishing," Padrines said.
Architects and engineering firms are also conservative when it comes to switching software licenses to a subscription model, which Nemetschek is advancing, Padrines says.
"The shift there will take another few more years," he said.
($1 = 0.8557 euros)
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