By Liana B. Baker
SAN FRANCISCO (Reuters) - SoftBank Group Corp (T:9984) said on Wednesday it was taking a significant minority stake in OSIsoft LLC, a privately held maker of industrial software used to manage plants and factories.
The world's largest industrial companies, from General Electric Co (N:GE) to Siemens AG (DE:SIEGn), have been incorporating more software into their manufacturing to cut costs and improve their supply chains.
SoftBank is buying out venture capital investors Kleiner Perkins Caufield & Byers, TCV and Tola Capital, it said in a statement. Japan's Mitsui & Co will remain an investor.
The investment is in the "high hundreds of millions" and values OSIsoft at several billion dollars, people familiar with the matter said on condition of anonymity because of the confidential terms.
SoftBank and OSIsoft declined to comment on the deal's valuation. But OSIsoft Chief Executive and founder Pat Kennedy said in a telephone interview that the company generates about $400 million in sales per year.
The investment is likely to be offered to SoftBank's new $94 billion Vision Fund, the world's largest private equity fund, with backers such as Saudi Arabia's main sovereign wealth fund and Abu Dhabi's Mubadala Investment, one of the sources said.
Founded in 1980, OSIsoft makes software that captures data from machines, including ships, chemical boilers and power plants, in industries such as oil and gas, utilities, mining, pulp and paper and water.
OSIsoft is a major software developer for the so-called "industrial Internet of Things," or a network of devices, vehicles and building sensors that collect and exchange data. That market could reach $120 billion by 2021, said Jake Reynolds, a general partner at investment firm TCV.
SoftBank founder and CEO Masayoshi Son has stated the Internet of Things was one his main investment themes and key to the company's $32 billion acquisition of semiconductor company ARM Holdings (LON:ARM) last year.
"When I met Masa," Kennedy said, "he immediately brought up ARM and wanted to see how all the companies in his portfolio can work together."
Kennedy added that OSIsoft wanted to work with another SoftBank-owned company, Sprint Corp (N:S) to expand into telecommunications.
The industrial software sector has undergone several mergers in recent years. Plex Systems Inc, a privately held U.S. maker of software used to run manufacturing plants, is exploring a potential sale.
Last year, General Electric acquired ServiceMax, which monitors devices for maintenance and other services, for $915 million, while Roper Technologies (N:ROP) bought software maker Deltek for $2.8 billion.
