Aptiv to buy Wind River for USD 4.3bn from TPG Capital
Tier One automotive supplier Aptiv is to buy Wind River from private equity firm TPG Capital for $4.3bn in cash.
Wind River has over 1700 customers and the technology, including the VxWorks real time operating system, is used in 2bn edge devices. It was bought by Intel in 2009 for $884m and sold to TPG in 2018 for an undisclosed sum and details of its business have been limited. The company had revenues of $400m in 2019, barely up from the $359m it last reported as an independent company in 2009.
Since then it has been trying to reinvent itself as a edge telecoms platform, including a deal with Vodafone to build an Open RAN network. It developed Helix and then Studio as a cloud-native intelligent systems software platform that enables full product lifecycle management.
The company still had 45 percent of its business in aerospace and defence, 30 percent in industrial and medical applications, with 15 percent in telecoms and 10 percent of the business in automotive.
Dublin-based Aptiv was formed from the powertrain division and aftermarket businesses of Delphi Technologies in December 2017 having bought driverless vehicle technology developer NuTonoMy. It has revenue of $13bn in 2020 with revenue of $1.8bn.
The deal takes advantage of the cybersecurity and edge processing capabilities for future driverless cars, particularly for the development of secure digital twin using data from the vehicles. In 2008, it was working with BMW, Intel and Magneti Marelli on a version of Linux that was part of the Genivi Alliance.
“The automotive industry is undergoing its largest transformation in over a century, as connected, software-defined vehicles increasingly become critical elements of the broader intelligent ecosystem,” said Kevin Clark, president and chief executive officer of Aptiv.
“Aerospace and telecoms have gone through the challenges facing automotive in developing cost effective software, and we believe the combination of Aptiv and Wind River gives us an opportainty for a significant portion of the $90bn automotive software market in 2023,” he said. “It’s an open solution and we think an open solution across multiple industriies is a more cost effective solution for our OEM customers but if they want to develop a portion of that operating syste, the middleware portion, that’s something they will be able to do.“
“Today edge computing for the automotive market there are some traditional players serving this market as middleware such as QNX and Vector that tends to devlop closed systems that are tied to AutoSAR. Wind River’s focus has been to date on industrial, telecoms and medical so our plan is to combine our joint capabilities for a more contemporay approach to the automotive market,” he said.
BlackBerry has announced design wins for the QNX operating system with BMW as well as Visteon, Nobo, WM Motor, Desay SV, Scania and Volvo Group.
“Wind River has established itself as a worldwide leader in cloud-native, intelligent edge software that delivers the highest levels of security, safety, reliability and performance,” said Kevin Dallas, president and chief executive officer of Wind River. “Combining Wind River’s industry-leading software, customer base and talent with Aptiv’s complementary technologies, global resources and scale will realize our vision of the new machine economy. Together we will accelerate the digital transformation of our customers across industries through best-in-class intelligent systems software. We look forward to working with the Aptiv team to reach even greater heights and provide further growth opportunities for our customers and partners.”
Aptiv will combine Wind River Studio offering with its complementary SVA platform and automotive expertise to extend its position in automotive software solutions, providing automotive customers with a faster and economical path to full vehicle software architecture. It will continue to be led by Kevin Dallas as a stand-alone business within Aptiv as part of the Advanced Safety and User Experience (AS and UX) business.