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Industrials

Sweden's Hexagon buys Intergraph for $2.1 bln

* Hexagon pays $2.1 bln cash for Intergraph

* Says deal to boost earnings from completion

* Acquisition financed via bank facilities

* Hexagon to raise $850 mln after deal through rights issue

(Adds detail, company, analyst quotes, share price reaction)

STOCKHOLM July 7 (Reuters) - Swedish measurement systems firm Hexagon AB HEXAb.STHEXAb.ST said on Wednesday it would pay $2.1 billion for U.S. software firm Intergraph to capitalise on expanding demand from energy, security and infrastructure firms.

Hexagon said the deal to buy Intergraph, which specialises in computer aided design and geospatial intelligence software, would boost earnings from closing and generate significant cost and sales synergies.

“Driven by global growth trends in key end-markets, particularly energy consumption and the need for security and infrastructure development, Intergraph is expected to continue to deliver significant growth in coming years,” Hexagon said in a statement.

The company said the deal was financed via bank facilities, but that it would look to raise $850 million from investors through a rights issue after the completion.

Analysts were broadly positive on the deal, which is seen leading to synergies, on a pre-tax basis, of around $30 million in 2011 and more in following years.

“What they are paying isn’t a small amount, but it is in line with what this kind of company is valued at in the industry,” said one analyst who declined to be identified.”

“And if they have the chance to achieve synergies, this could really be a good deal for them.”

Hexagon shares were up 8.3 percent at 1127 GMT, the second best performer on the Stockholm exchange .OMXSPI.

Hexagon said Intergraph is expected to report sales of approximately $830-840 million and earnings before interest tax, depreciation and amortisation (EBITDA) of approximately $200-210 million in 2010.

Intergraph had sales of $770 million in 2009 with EBITDA of $189 million.

The United States made up around 40 percent of Intergraph’s sales in 2009, with Europe, the Middle East and Africa next largest followed by the Asia Pacific region.

Hexagon had sales of 11.8 billion Swedish crowns ($1.54 billion) in 2009 and made an operating profit of 1.8 billion, excluding non-recurring items.

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