UK-based Aveva is in talks to purchase OSIsoft, the SoftBank-backed US software company, in a deal that would deepen consolidation in the technology sector and give a boost to SoftBank’s flagging investment portfolio.

In a statement, industrial software provider Aveva confirmed it had entered discussions with OSIsoft about an acquisition but said there was no certainty the discussions would lead to an agreement on a deal.

Aveva is offering to buy OSIsoft for more than $5bn, according to one person briefed on the negotiations. The companies did not have any immediate comment on the price.

An acquisition would be a potential win for SoftBank, which in 2017 purchased a minority investment from OSIsoft’s earlier investors — Kleiner Perkins, Technology Crossover Ventures and Tola Capital. SoftBank holds the investment in its $100bn Vision Fund, which is backed by Abu Dhabi and Saudi Arabian government funds.

The technology sector has seen a wave of consolidation in recent months. In July, Analog Devices agreed to buy rival chipmaker Maxim Integrated Products in an all-stock transaction worth $21bn.

OSIsoft, founded in 1980, sells software that companies such as pharma and chemicals group Merck use to manage real-time data, for example the conditions inside of a laboratory or manufacturing plant. 

Cambridge-based Aveva is majority owned by French company Schneider Electric.

The talks come as US chip company Nvidia makes a play of more than $32bn for SoftBank’s Arm Holdings, the UK chip designer Masayoshi Son, SoftBank’s chief executive, once said would be the linchpin for the future of the Japanese conglomerate. 

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Both deals would help SoftBank’s Vision Fund raise cash for investors, who have expressed reservations about committing money to a second fund until they see more progress from the first. 

The Vision Fund carried a loss of $800m as of the end of March, having marked down the valuations of 47 investments while marking up 26 companies, according to a SoftBank presentation.

Bloomberg first reported the discussions.

Via Financial Times