Seamless Electronics Sourcing

Siemens Pays 700 Million US$ for Supplyframe

20. Mai 2021, 12:08 Uhr | Ute Häußler
Roland Busch Siemens
Supplyframe is the first acquisition of Dr. Roland Busch, who has been leading Siemens AG since October 1, 2020 and has to realign the company.
© Siemens

US$ 700 Million to combat stressed supply chains: Siemens buys Supplyframe, a leading online platform for the global procurement of electronic components. In combination with the company's own industrial software, Siemens customers will be enabled to produce their designs faster.

About 100 days after the new Siemens CEO Roland Busch took office, there are indications of how he wants to position the company: In the future, Siemens will also be involved in the trade with components via digital platforms. 

The Californian company Supplyframe emerged from and is today one of the leading design-to-source platforms for global value chains of electronic components. The transaction will cost Siemens $700 million and is expected to strengthen Siemens' SaaS (Software as a Service) offering - particularly in the areas of Electronic Design Automation (EDA) and Printed Circuit Boards (PCB). The acquisition will provide Siemens with valuable market insights into which components are currently in demand and available. This data probably also justifies the hefty purchase price; Supplyframe currently generates annual sales of around 70 million US dollars.

Digital Marketplace Strategy for SMEs

»We are delighted to welcome Supplyframe's highly innovative and talented team to the Siemens family. Supplyframe will be the nucleus for accelerating our digital marketplace strategy,« said Cedrik Neike, Member of the Managing Board of Siemens AG and CEO Digital Industries. »Supplyframe's ecosystem and marketplace expertise perfectly complement our industrial software portfolio. It also allows us to better serve the growing market of small and medium-sized enterprises,« Neike added.

Supplyframe has built a strong Design-to-Source Intelligence (DSI) ecosystem in recent years with more than ten million engineers and buyers worldwide. This greatly simplified product development, sourcing, marketing and sales for companies in the global electronics value chain. The business volume of the SaaS solution grew at 40% p.a. over the last years. Siemens expects growth rates to continue at this rate.

Action against Supply Bottlenecks

»The electronic component sourcing bottlenecks in recent months have exposed the vulnerability of supply chains and clearly demonstrated that digital transformation and smart decision making are essential. I am very excited to be joining forces with Siemens, which will allow us to scale our innovations and drive broader, global adoption of our DSI solutions,« said Steve Flagg, CEO and founder of Supplyframe.

Siemens expects significant synergies between Supplyframe and the Siemens portfolio with a net present value in the mid three-digit US dollar million range. In addition, the acquisition is expected to be accretive to Siemens' earnings per share before purchase price allocation in the second year following the closing of the transaction. Steve Flagg will remain CEO of Supplyframe and will additionally become part of the Siemens Digital Industries Software leadership team. The closing of the transaction is subject to customary closing conditions and is expected to occur in the last quarter of fiscal 2021.

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