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Alarm bells ring as BAE Systems pounces on BISim

17th November 2021 - 09:21 GMT | by Trevor Nash in Holsworthy

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BISim's flagship product, VBS4. (Photo: BISim)

With BAE Systems set to buy Bohemia Interactive Systems, how will the new ownership team deal with current and future customers?

In what is a surprising move for many observers of the training and simulation industry, BAE Systems has entered into a definitive agreement to acquire Bohemia Interactive Simulations (BISim).

Formed in 2001, BISim employs 325 people and over the past two decades has increased its presence in the global training and simulation market through the use of game-based technologies for defence applications and licensing products such as VBS4, VBS Blue IG and VBS World Server.

In 2013, BISim was acquired by The Riverside Company, ‘a global investment firm’ that provides funding to stimulate growth and provide investment opportunities for corporate investors. This deal effectively separated BISim from Bohemia Interactive; the latter being the former Czech-based mother company that focuses on the production of consumer games.

This Riverside investment has been good for BISim; in conversation with Shephard in mid-October 2021, the company’s co-CEO Pete Morrison said that ‘we have thousands and thousands of licenses out there in over 60 countries and we are currently hiring to meet a growth in demand'.

Like all organisations that are bought by private equity companies, the day arrives when they are sold on, and this is what has happened to BISim.

Over the coming months, BAE Systems says that it ‘will undertake the customary regulatory and pre-closing activities necessary to complete this type of international transaction’. The financial details of the deal have not been released.

In a press release on 11 November, BAE explained: ‘With the successful completion of this acquisition, BAE Systems customers would have access to the company’s extensive and proven system integration experience complemented by BISim’s innovative training products and solutions to enhance military readiness for the US and our allies.’

It must be said that BAE Systems is not renowned for its prowess in the training and simulation sector where, like many mega-defence and aerospace giants, the focus tends to be on high-end platform design, development and delivery. 

Not surprisingly, BAE Systems has nuggets of simulation expertise across its organisation and, although an attempt was made in the early 1990s to bring these together as BAE Simulation Ltd, the experiment failed and that company was dissolved.

This announcement is also likely to send a shiver of nervousness through current and future BISim customers, as at present they deal with a relatively small, proactive, independent and agile company. 

There is also the question of the corporate strategy at BAE Systems; will they supply all future potential customers, or will they become more selective in who they deal with on the grounds of potential competition?

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