Intergraph, Bentley settle; Bentley buys back $200 million in shares

Brian Lawson of The Huntsville Times is reporting that Intergraph and Bentley Systems have agreed to suing each other, after Bentley agreed to buy back nearly $200 million worth of its own shares.

The two companies have a long, unhappy history with each other. Intergraph was one of the very first, large, successful CAD vendors who sold turnkey systems -- software running on hardware it built itself. In fact, Intergraph's hardware was so good that Intel stole some of Intergraph's CPU technology, the so-called Clipper Case. (In the end, Intergraph benefited from the theft, by collecting hundreds of millions in royalties from Intel, HP, and other PC makers. I was a consultant on the Intergraph vs HP case.)

Bentley's first software allowed users to view Intergraph drawings on a PC, which acted as a terminal to Intergraph's proprietary hardware. (The software's first name was PseudoStation.) This meant that customers didn't need to buy as much hardware from Intergraph, causing Intergraph to launch its first law suit against Bentley.

But as the PC became the de facto hardware platform laster in the 1980s, Intergraph realized Bentley had done its work for it (porting Intergraph software to PCs), and so the two struck up a distribution deal: young Bentley would write the software (since renamed MicroStation), while Intergraph would market and distribute it.

To help Bentley fund its operations, Intergraph purchased half (?) of Bentley in the form of shares; later, it reduced its share to 1/3.

Eventually, Bentley got big enough to do its own marketing and distribution, and it even got big enough to buy Intergraph's civil engineering software. This created the next law suit: first Intergraph sued Bentley in 2002 over the terms of a promissory note, and then Bentley sued back over the terms of the maintenance Intergraph was providing.

So eight years later, the two have come to an agreement. Bentley will buy back all of its 15.6 million outstanding shares for about $198 million. Oh, and they promised each other to keep all this a secret.

The winner in all this is the lawyers, naturally; lawyers on the Intergraph side pocketed $9.9 million. Nice work, when you can get it.

Source.

Comments

[djcella]

To me this one more episode in a long running soap opera and a bad one at that. The acrimony continues after all these years. I doubt anyone cares at this point.