Aptiv acquires IoT operating system maker Wind River for $3.4B
Auto parts giant Aptiv PLC is buying Wind River Systems Inc., a firm whose software runs on 2 billion “internet of things” devices, in a $3.4 billion acquisition announced today.
Aptiv is acquiring the company from TPG Capital, the private equity arm of investment firm TPG. TPG Capital, in turn, bought Wind River from Intel Corp. in 2018 for an undisclosed sum. Wind River was an Intel subsidiary for nearly a decade and earlier operated as an independent company.
Wind River’s software is used in more than 2 billion IoT devices ranging from industrial robots to NASA’s Perseverance rover. The company sells a real-time operating system, VxWorks, that’s optimized to run on IoT systems with limited processing capacity and extensive software reliability requirements. Wind River also offers a second, Linux-based operating system for connected devices.
Aptiv is a major manufacturer of auto parts with about 180,000 employees worldwide. Wind River’s operating systems are only part of the reason the company made the $3.4 billion acquisition offer. Through the purchase, Aptiv is also set to obtain another product called Wind River Studio that could boost its presence in the vehicle software market.
Wind River Studio is a suite of development tools designed to ease the task of building software for connected devices. The platform provides testing features that help programmers evaluate their code’s reliability before rolling it out. Wind River Studio simplifies the build process, or the task of turning code into a functioning program, and helps development teams maintain their software after releasing it to production.
“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 Wind River President and Chief Executive Officer Kevin Dallas. “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.”
Aptiv will use Wind River Studio to enhance the collection of software products it offers to automakers. Wind River’s software is already used by a number of companies in the auto sector for use cases such as powering advanced driver assistance systems.
Aptiv’s plan for the acquisition includes integrating Wind River Studio with its Smart Vehicle Architecture, or SVA, platform. It’s a set of components and methods for managing the software in smart vehicles.
One of the main selling points of SVA is that it allows automakers to update the software in a vehicle separately from the hardware. An automaker could use Wind River Studio to develop software for a vehicle and then leverage SVA to streamline tasks such as software maintenance.
SVA also provides other features. The platform includes specialized devices built to manage the process of sending data from a vehicle’s subcomponents to the onboard computer. The devices help with maintenance as well, according to Aptiv. They detect when one of the wires in a vehicle is about to experience a malfunction and generate alert to streamline maintenance.
Software is emerging as a key priority for automakers and their suppliers as the industry works to roll out more autonomous driving features to vehicles. Auto industry players are also investing in new chips to run the increasingly sophisticated software they deploy. General Motors Co., for instance, recently partnered with Qualcomm Inc. to use the chipmaker’s silicon in its upcoming Ultra Cruise driver assistance system.
“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 Aptiv President and CEO Kevin Clark. “Fully capitalizing on this opportunity requires comprehensive solutions that enable software to be developed faster, deployed seamlessly and optimized throughout the vehicle lifecycle by leveraging data-driven insights.”
Alongside Wind River’s software assets, the acquisition buys Aptiv a customer base of more than 1,700 organizations. Aptiv disclosed today that Wind River generated approximately $400 million in revenues last year across its installed base.
Aptiv is financing the deal with a combination of cash and debt. The company expects to complete the transaction the middle of 2022.
Photo: Wind River
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