Another conglomerate sees the light.

Throughout my business life, I have witnessed corporate hubris build huge incomes and stock prices—for a while. Then the inevitable payment came, and the house of cards came tumbling down. 

Once I worked for a division of Beatrice Foods. Beginning as a dairy producer (Meadow Gold milk helped me pay college expenses), its corporate overlords added recreation vehicles, yachts, luggage, air hand dryers, and more. Unsustainable.

I once met Harold Geneen of ITT when he discussed how he managed the huge conglomerate of up to 350 companies.

Then there was the house of cards Jack Welch built at GE ending in divestitures and eventual breakup. Honeywell, once almost a twin of GE, is now undergoing a similar breakup into smaller, more agile individual parts.

Enter Hexagon AB. It began life in Sweden as an oddly structured conglomerate. They brought on board a new CFO to supposedly focus investments. Yet since 2001 it has made something like 135 acquisitions. Too much to manage, Hexagon board has directed management to prepare for the separation of its Asset Lifecycle Intelligence (ALI) division and related businesses. For those of us with histories in US software companies think Intergraph, Infor, and PAS (among others).

From the press release:

4 March 2025—Hexagon AB announces that the Board of Directors, after a comprehensive assessment, has directed management to prepare for the separation of its Asset Lifecycle Intelligence (“ALI”) division and related businesses (“NewCo”) by way of a Lex Asea distribution (or “spin-off”) to its shareholders, as previously announced on 25th October 2024. The Board intends to propose the distribution and listing of NewCo’s shares at a shareholder’s meeting in early 2026, provided that the circumstances are deemed right at the time. 

Reflecting the geographical focus of NewCo’s business, Intergraph’s heritage as a U.S. public company and the location of its management team, Hexagon expects NewCo to list on a U.S. national securities exchange. Subject to regulatory approvals, Hexagon will establish a temporary Swedish Depository Receipt programme for NewCo via a listing on Nasdaq in Stockholm, for existing shareholders to locally participate in potential value creation and facilitate the transition to the U.S. listing.

After the Board’s evaluation, Hexagon has expanded the expected perimeter of NewCo to include the remainder of Hexagon’s Safety, Infrastructure & Geospatial (“SIG”) division, as opposed to solely the Utilities & Infrastructure business within SIG, as was previously communicated. As before, the NewCo perimeter will include the ETQ business (currently operating under the Manufacturing Intelligence division) and the Bricsys business (currently operating under the Geosystems division).

NewCo will be a pureplay software and SaaS company, offering comprehensive asset lifecycle intelligence, safety, infrastructure, and geospatial capabilities for a wide array of industries. NewCo will leverage best-in-class capabilities across diverse domains, applying them in new ways to deliver previously unrealised market advantages. With a data-centric strategy, NewCo will help customers plan, operate, and maintain assets more effectively, enabling clearer insights and better incident response. As a standalone company, NewCo will also have increased flexibility to pursue its distinct operating strategy, accelerate a SaaS transition and shift to recurring revenues, and establish a separate currency for future M&A. As previously announced, NewCo will be led by Mattias Stenberg who is currently President of Hexagon’s ALI division.

NewCo, including SIG, ETQ and Bricsys, had approximately 7,200 employees as of December 31, 2024, and revenues of approximately EUR 1,448 million with an adjusted operating margin (EBIT1) of approximately 31% for the year ended December 31, 2024, before consideration of standalone costs and using IFRS accounting standards.