Siemens has signed an agreement today to acquire Mendix, digital transformation enabler platform that helps businesses to build web and mobile applications without the need to code – what’s called low-code development.

Under the agreement, Siemens will pay in cash €0.6 billion to acquire the company. Mendix, however, will retain its distinct brand, culture and continue serving customers across the full range of industries with its unique platform and broad ecosystem and community.

As part of the acquisition Siemens will continue to invest in Mendix’s independent product roadmap, continuing its legacy as the most-innovative, open low-code cloud platform. Mendix will be part of the software business of Siemens’ Digital Factory (DF) Division, with the Mendix platform also deployed across other Divisions.

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Demand for business application is growing

As enterprises invest to digitalise their operations, demand for business applications is growing significantly faster than the capacity of IT organisations to deliver them. Low code application development platforms provide features for rapid development, deployment and execution of applications in the cloud for those who do not know how to code.

“We acquire Mendix to extend our leading position in digitalising the industrial world, which is a cornerstone of our Vision 2020+”, said Klaus Helmrich, member of the Managing Board of Siemens AG.

“Mendix is a leader in the rapidly expanding low-code segment and their platform will help our customers to adopt MindSphere even faster by accelerating cloud-based application development for the Industrial Internet of Things (IIoT)”, he added.

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“As part of our digitalisation strategy, Siemens continues to invest in software offerings for the digital enterprise. With the acquisition of Mendix, Siemens continues to add to its comprehensive Digital Enterprise and MindSphere IoT portfolio, with cloud domain expertise, cloud agnostic platform solutions and highly skilled people,” said Jan Mrosik, CEO of the Digital Factory Division.

Strong growth predicted

Mendix was founded in 2005 in Rotterdam, Netherlands and is headquartered in Boston, Massachusetts. The company has over 400 employees and its software-as-a-service business model results in over 90% of sales being recurring.

Siemens expects Mendix to continue to experience strong growth in the future in both its existing customer segments and across the Siemens customer base. Mendix will help accelerate Siemens’ current cloud, IoT and digital enterprise software capabilities. The low-code platform will also continue to deploy its technology to customers and partners across all verticals and technology ecosystem.

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“When we pioneered the low-code market over a decade ago, we had a bold vision to help customers change the way they build software, but we never imagined the oceanic opportunity that’s now in front of us,” said Derek Roos, co-founder and CEO of Mendix.

“I’m thrilled to accelerate our vision at a much larger scale with the incredible team, assets, industry know-how and footprint of Siemens behind us. Being part of Siemens will allow us to serve our customers even better by accelerating our R&D vision, adding a much larger pool of go-to-market resources, and leveraging an enormous global infrastructure. And we’ll do this while maintaining our unique culture, brand and R&D capability that has allowed us to become the leader in our space – I can’t think of a better outcome for our customers, community, partners and team.”

Closing of the transaction is subject to customary conditions and is expected in the first quarter of fiscal year 2019. Siemens expects to achieve synergies through a combination of revenue growth and anticipated margin expansion, representing a net present value of more than €0.5 billion. Additionally, the transaction is expected to be EPS accretive within four years from closing. Derek Roos will remain CEO of the company and join the Siemens PLM Software senior leadership team

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