RtTech Software of Moncton has sold a key product to Bedford, Mass.-based Aspen Technology, providing a capital injection for the company and the growth of two operations in the Moncton area.
Aspen said in a statement Tuesday it purchased RtTech’s Cipher Industrial Internet of Things software and associated assets for an undisclosed price. The buyer will bring on board RtTech CEO Keith Flynn and seven other Moncton-based employees to continue with this business.
Meanwhile, RtTech itself will continue to build its business with the products it has been selling since the beginnings of the company six years ago.
“This is a phenomenal exit,” said Flynn in an interview this morning. “It had the unanimous approval of all our shareholders.”
RtTech’s IIoT applications help large industrial companies monitor and make decisions on energy consumption and operations using data captured by sensors installed in the plant’s machinery. Its main products are RtEMIS, which can pinpoint when and where part of a system is using excess energy, and RtDUET, which allows companies to examine specific processes to find the cause of downtime and poor utilization issues.
The company had released a cloud-based product in 2015, but then learned it was difficult to scale the product profitably. So a big part of the work in 2016 was reworking the product so it would meet demand.
Flynn said in the interview that for a few years the company has had two divisions – the R&D division working on the Cipher product, and the established portion dealing with RtEMIS and RtDuet. He added that Operations Manager Jeff Milton has been promoted to President of RtTech and will oversee the company going forward. “RtTech is in good hands,” he said.
Aspen said in the statement the Cipher software it is buying delivers on the IIoT promise of high performance connectivity for a range of industrial equipment without having to rip out existing apparatus. It spares industrial users the expense of having to build their own IIoT systems to tap the productivity gains associated with having machines communicate with one another and react in real-time.
That makes the solution, which is based on Microsoft’s Azure Internet of Things platform, an affordable option for a range of industrial customers.
Aspen Technology, which has 2100 industrial clients, plans to integrate Cipher into its aspenONE software to enhance its modeling and machine learning abilities.
“The acquisition of RtTech Software technology delivers another essential piece in support of our asset-optimization strategy,” said AspenTech President and CEO Antonio Pietri in the statement. “Combining RtTech’s capabilities with AspenTech APM software will offer our customers comprehensive solutions for Industrial IoT, Analytics and Machine Learning, with both on-premise and cloud-based deployment options.”
Though the value of the deal was not announced, the deal is undoubtedly good news for RtTech’s shareholders. Flynn was unable to provide any information on whether the proceeds of the sale would remain with RtTech or be distributed to investors.
RtTech in 2015 raised $2.5 million in funding from McRock Capital, a Toronto-based venture capital fund specializing in IIoT enterprises. As of March 2017, RtTech had received a total of $1.25 million from the New Brunswick Innovation Foundation, making it the largest single investment target of the provincial innovation agency. In 2012, the company also raised $250,000 in funding from individual investors, including the founders of ADM Systems Engineering, the Saint John company from which it was spun out in 2011.
As of February, RtTech had customers in 28 countries and now the Cipher team hopes to continue to grow its client base with the help its new payment.
“We look forward to being a key part of AspenTech’s Asset Optimization strategy, leveraging our best-in-class Industrial IoT and cloud-based technologies,” said Flynn in the statement. “ AspenTech will also provide us with the go-to-market capabilities to bring Cipher to a broader range of customers.”