Paradigm sold

Emerson’s $510 million deal extends software portfolio upstream with seismic processing. Skua geomodelling overlaps with RMS.

Emerson has ‘agreed to acquire’ Paradigm Geophysical for $510 million from its current investors, a VC group including Apax Partners and JMI Equity. The deal is said to represent ‘13x expected 2017 Ebitda.’ Apax/JMI acquired Paradigm from Fox Paine in 2012 for $1 billion cash. Emerson CEO David Farr said, ‘This significant technology investment meets a growing demand for an independent, global provider of E&P software solutions. When combined with Emerson’s Roxar portfolio, Paradigm expands the global upstream oil and gas capability of our Plantweb digital ecosystem.’

A three slide deck on the Emerson website shows how Paradigm’s software will extend Emerson’s portfolio upstream into seismic imaging. Coverage is now pretty complete with the possible exception of fluid flow modeling. But there is an interesting overlap in the static geomodelling space with both Paradigm’s Skua and Emerson’s RMS as competing flagships. According to the NDB SAB benchmark (page 7), RMS and Skua/Gocad are in the top three of their category. Emerson also reports that ‘the $3.6B E&P software market is down 10% since its 2015 peak.

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