Chief Executive Officer (CEO) of German industrial conglomerate Siemens, Roland Busch attends the virtual annual shareholder meeting in Munich, Germany, February 10, 2022. Sven Hoppe/Pool via REUTERS
Chief Executive Officer (CEO) of German industrial conglomerate Siemens, Roland Busch attends the virtual annual shareholder meeting in Munich, Germany, February 10, 2022. Sven Hoppe/Pool via REUTERS Reuters / SVEN HOPPE

Siemens is buying U.S. tech company Brightly Software from private equity owner Clearlake Capital for $1.58 billion, the German engineering group said on Monday, its latest move to broaden its software credentials and grow faster than rivals.

Siemens Smart Infrastructure, which offers digital systems to manage buildings' security and energy consumption, is buying Brightly to expand its offering in the area of "software as a service" (SAAS).

Brightly, based in North Carolina, makes cloud-based software that collects data from sensors installed in buildings and analyses when maintenance will be needed before a problem occurs.

"Today's acquisition bolsters our growth targets, especially for digital revenue and software as a service," Siemens Chief Executive Roland Busch said in a statement.

SAAS increases Siemens' access to small- and medium-sized customers by making software a subscription rather than a purchase.

Clearlake bought Brightly, whose products are used in schools, hospitals, offices and factories, for roughly $500 million in 2019.

Brightly expects revenues of around $180 million for 2022, and operates in a market with an annual growth rate of 13%, Siemens said.

Matthias Rebellius, chief executive of Smart Infrastructure and a member of Siemens' managing board, said Brightly's maintenance asset management software complemented Siemens' existing offering in building management software.

"An owner of a real estate portfolio wants to optimize its operational expenditure and make sure the asset is more valuable if and when they sell it," he told Reuters. "It can reduce downtime and can generate significant savings."

The deal will improve profitability at Smart Infrastructure, with Brightly's current margins above the division's 11-16% midterm target.

Siemens said the deal, which is expected to be completed by the end of 2022, will be accretive to earnings per share in the second year after closing.

The acquisition is part of Siemens' ambition to grow faster than rivals like France's Schneider Electric and Alstom as well as General Electric by combining its core engineering business with digital expertise.

Siemens would continue to target small deals to boost Smart Infrastructure, Rebellius said.

Siemens last year said it wanted to enter additional markets with a value of 120 billion euros, with software as a service seen as a key part of the strategy.