Business Weekly - Cambridge, UK

Whilst unveiling its second Chinese office and a $3m licencing agreement for its shipbuilding software, rumours emerged that the Cambridge-based firm may be on the brink of a $430m (£208m) acquisition.

AVEVA has made no secret of its intention to expand through an acquisition, but CEO, Richard Longdon told BW that the company was "looking but doesn't have any deal lined up as yet."

"The size could be up to one third the size of AVEVA, just as Tribon was when we did that deal in 2004," he continued.

Swedish marine engineering IT company, Tribon was the subject of a £19m buyout by AVEVA in May 2004.

The firm has been eyeing the construction sector for a potential mark, because "it fits what we do and we understand it," said Longdon.

AVEVA is looking for a new home for the £54.5m in cash it reported in its first half figures in September, but "the money isn't burning a hole in our pocket in terms of feeling any pressure to make an acquisition," Longdon said.

The engineering software specialist has seen a recent surge in sales, benefitting from raised production in the oil industry, one the company's biggest markets, a bi-product of the big oil companies rushing to exploit the currently inflated oil prices.

"We are in the very fortunate position of being in a very strong growth phase organically and as a cash generative business our cash balance is growing," said Longdon. 

"But we aren't a bank. |f we can't use it, we'll give some back. If we don't have a deal in process or close by the time of our next results we might decide to distribute some of our surplus cash to shareholders."

AVEVA is expected to announce its full year results on May 22, 2008.