Nemetschek to Buy HCSS in Biggest Deal Ever, Expanding North America Heavy Civil Software Reach

Key Points

• Nemetschek signed a definitive agreement to acquire HCSS in what management called the largest acquisition in the company's history, expected to close in H2 2026, with Thoma Bravo becoming a ~28% minority owner of the enlarged Build & Construct segment and Nemetschek taking on refinancing that will raise Group net debt by about €450 million.
• HCSS is a highly profitable, recurring-revenue leader in North American heavy civil software (about $215M revenue in 2025, ARR +21%, ~40% EBITDA margin, churn <2%), and Nemetschek says the deal expands its Build & Construct addressable market by >30% with HCSS expected to grow close to the high teens.
• Nemetschek forecasts at least a mid-double-digit million euro EBITDA synergy by 2028 (roughly half from revenue, half from cost) and plans to combine HCSS’s industry data with its AI initiatives to strengthen vertical AI offerings across AECO workflows.

Nemetschek ETR: NEM announced it has signed a definitive agreement to acquire Heavy Construction Systems Specialists (HCSS), a provider of software for infrastructure and heavy civil construction contractors in North America. CEO Yves Padrines said the acquisition is expected to close in the second half of 2026, subject to customary regulatory approvals and closing conditions, and described it as “by far the largest acquisition” in the company’s history.

On the conference call, Padrines framed the deal as a “transformative step” intended to strengthen Nemetschek’s Build & Construct segment and accelerate its ambition to become a global leader in the AECO (architecture, engineering, construction and operations) software industry. CFO Louise Öfverström joined him for the call alongside Senior VP of Corporate Communication and Investor Relations Stefanie Zimmermann.

Strategic rationale: expanding infrastructure exposure and North America presence

Padrines said Nemetschek views infrastructure and heavy civil construction as an attractive end market supported by structural drivers including aging infrastructure, government investment, urbanization, low digitalization levels, and labor shortages. He said adding HCSS would expand Nemetschek’s addressable opportunity in Build & Construct by “more than 30%,” describing a software market expected to grow at an around 11% CAGR and reach approximately $12 billion by 2028.

Nemetschek also emphasized the combination of HCSS with existing Build & Construct brands, including Bluebeam, GoCanvas (including SiteDocs), and NEVARIS, to create what Padrines called a “global construction technology powerhouse” spanning both building construction and infrastructure workflows.

HCSS overview: recurring revenue, high profitability, and low churn

Padrines described HCSS, headquartered in Sugar Land, Texas, as a leading vertical software provider built for self-performing heavy civil contractors. He said HCSS has more than 550 employees and more than 4,000 customers primarily in the U.S. and Canada.

Financially, Nemetschek highlighted HCSS’ growth and profitability profile. Padrines said HCSS generated around $215 million in mainly recurring subscription-based revenue in 2025, posted an ARR increase of 21% in 2025, and delivered an EBITDA margin of around 40% under U.S. GAAP. He also said HCSS has “extremely low churn” below 2%.

In Q&A, Padrines attributed the 2025 ARR growth primarily to “very strong new logos and user growth,” noting HCSS pricing is not strictly per seat and can vary based on customer size and project size. He added that, looking forward, Nemetschek expects “very high-teens” revenue growth for the coming years, “close to 20%” for HCSS.

Transaction structure: Thoma Bravo to become minority shareholder in Build & Construct

Nemetschek detailed a tailored structure that brings Thoma Bravo—HCSS’ owner—into the Build & Construct segment as a minority shareholder. Padrines said the structure was selected to avoid significantly higher leverage that would have been required under a traditional debt-financed acquisition, preserving balance sheet flexibility for future investments.

Under the structure outlined on the call:

• Thoma Bravo will contribute HCSS into Nemetschek’s Build & Construct segment in exchange for a minority shareholding in the combined segment.
• Nemetschek will refinance HCSS’ existing financial debt and liabilities, which management said would impact Nemetschek Group net debt by approximately €450 million.
• Following closing, Nemetschek is expected to hold about 72% of the enlarged Build & Construct segment, with Thoma Bravo holding around 28%.

Öfverström said the refinancing would be done at the Nemetschek Group level and passed through via intercompany arrangements so the debt sits in the Build & Construct division. She added that “both shareholders are liable” proportionally for growth and interest expense and said the company expects “quick deleveraging as always” in the segment.

Addressing governance, Padrines said Thoma Bravo will not have a seat on Nemetschek’s Group board but will have minority board representation at the Build & Construct segment level.

Jefferies analyst Charles Brennan asked whether there was a put/call arrangement for Nemetschek to buy out Thoma Bravo’s stake. Padrines said “there is no put and there is no call at all,” and outlined potential exit routes including Nemetschek acquiring shares, another sponsor acquiring Thoma Bravo’s shares, or an IPO “only for Thoma Bravo shares,” adding Nemetschek would remain the majority owner.

Synergies and AI: cross-selling, integration, and data-driven applications

Nemetschek projected medium-term synergies across revenue initiatives and cost efficiencies. Padrines said Nemetschek sees synergy potential of “at least a EUR mid-double-digit million amount on EBITDA in 2028.” In response to Barclays, he said management expects roughly half of that EBITDA synergy to come from revenue and half from cost savings.

Examples cited on the call included Bluebeam expanding further into infrastructure collaboration workflows, GoCanvas strengthening forms and safety solutions for HCSS while benefiting from HCSS’ customer base, and NEVARIS enhancing its infrastructure offering in the DACH region by leveraging HCSS capabilities.

Management also repeatedly linked the acquisition to its goal of becoming a “vertical AI leader” in AECO. Padrines said HCSS brings decades of proprietary industry-specific data, which Nemetschek expects to combine with its own AI efforts, including the Nemetschek AI Hub and the Firmus.ai acquisition. He referenced HCSS AI features such as an AI-assisted custom estimate builder and “quick pricing” functionality leveraging historical production data. Öfverström added that in a conservative industry, “trust is the basis for everything in AI,” and said the combined domain expertise and market trust represents a “unique opportunity.”

On competition, Padrines said HCSS is the clear leader in North American heavy civil and infrastructure software, naming InEight and Trimble as “two number two-ish” players and describing Autodesk and Procore as having “a very small market share” in that segment.

Nemetschek said it will provide additional details on the transaction’s impact on financials and the current-year outlook after closing. Until then, management said, both companies will continue to operate independently.

About Nemetschek ETR: NEM

Nemetschek SE provides software solutions for architecture, engineering, construction, media, and entertainment markets in Germany, rest of Europe, the Americas, the Asia Pacific, and internationally. It operates through four segments: Design, Build, Manage, and Media. The Design segment offers software solutions primarily under the Allplan, Graphisoft, Solibri, Precast, Vectorworks, SCIA, dRofus, Frilo, and RISA brands for architects, designers, engineers, structural engineers, specialist planners, and landscape designers, as well as developers and general contractors.

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