Huge news: Intergraph, a supplier of high-end plant design and data management tools, announced today that it had acquired COADE, a privately-held supplier of AutoCAD-based plant design and stress analysis tools. Terms of the deal were not disclosed; the COADE team remains intact in Houston.

COADE is the largest of the stand-alone plant design vendors to base a product on AutoCAD and has therefore been most affected by the introduction of Autodesk’s AutoCAD plant design products over the last few years. Rampant speculation about its future has now been answered: the private equity firm that owned a large chunk of COADE chose to divest its holdings and Intergraph was the best candidate in terms of offer and commitment to COADE’s installed base. Said COADE CEO Tom Van Laan, ““We believe the combination of COADE and Intergraph will bring a new level of functionality and support for our customers worldwide. With Intergraph, we are confident of continuing the development of our product suites and the commitment to service that our customers have come to expect.””

Intergraph gets two product sets with this acquisition: CADWorx, the plant design suite, and CAESAR II, PV Elite and TANK products, arguably the industry standard tools for pipe stress, pressure vessel and storage tank analysis.

Intergraph has promised that COADE clients will “receive uninterrupted support, maintenance and software upgrades as part of their maintenance agreement with Intergraph” even as Intergraph “enhances product integration and migrates the COADE analysis solutions into SmartPlant Enterprise to leverage design and modeling with pipe and vessel analysis ... [to] enhance productivity and enable a more seamless flow of engineering information among the software applications.” Every COADE employee (except one in a “redundant financial position”) will join Intergraph and continue to build out and support COADE’s products from COADE’s Houston office.

From the materials provided by Intergraph about the acquisition, it appears that COADE’s sales channel will be most affected by the deal. COADE has been sold mostly via a dealer channel; Intergraph mostly via direct sales. Intergraph says that, after a six month evaluation, it will “evaluate ways to further optimize sales costs and support quality for all clients.” This likely means transitioning products away from dealers -- but we’ll see because it could also mean that some of COADE’s partners will be able to sell some of Intergraph’s SmartPlant products.

For Intergraph, this is a very strategic deal:  it locks up another of the industry’s standard tool sets (after acquiring the ISOGEN isometric drawing tool with its Alias acquisition in 2006).  Intergraph also gains entry, with CADWorx, into the smaller project market which is less receptive to high-end tools, as well as  possibly getting a new sales channel -- not bad for one deal.