We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
PTC Inc (PTC) Announces Buyout of Arena Solutions for $715M
Read MoreHide Full Article
PTC Inc. (PTC - Free Report) announced the buyout of Arena Solutions, Inc. to capture a larger share of the software as a service (SaaS)-based product development market, especially among midmarket customers.
Headquartered in Foster City, CA, Arena Solutions is a privately-held company that specializes in providing cloud-based SaaS product lifecycle management (PLM) applications solutions and product-centric quality management system (QMS) solutions.
Arena Solutions’ SaaS offerings enable customers to optimize product development process as well as improve supply-chain relationship and augment closed-loop quality processes. The company has more than 1,200 customers across verticals like medical device industries, high and electronics.
The acquisition of Arena Solutions will be accretive to PTC’s financials beginning from fiscal 2022 and beyond. However, PTC added that the transaction will not contribute to its cash flow from operations and free cash flow targets for fiscal 2021. The company expects to report $365 million as cash flow from operations and $340 million as free cash flow for fiscal 2021.
PTC added that Arena Solutions is expected to register a double-digit year-over-year growth in annualized recurring revenues (ARR) and reach $50 million for 2020.
PTC will pay $715 million for the acquisition of Arena Solutions, which will be funded by utilizing cash in hand and the amount available under the existing credit facility. The buyout, subject to regulatory and customary conditions, is slated for closure in the company’s second quarter of fiscal 2021.
PTC added that it will divulge more details about the transaction at its upcoming Investor Day virtual meeting to be held on Dec 15, 2020.
Arena Acquisition to Boost Presence in SaaS based PLM Market
Per a Grand View Research report, the PLM market is expected to witness a CAGR of 6.2% between 2020 and 2025. PLM refers to efficient management of information throughout the product lifecycle on real-time basis, while offering cost savings and improving time to market for new products, added the report.
PTC noted that the COVID-19 crisis has accelerated the adoption of SaaS-based solutions. Citing PTC customer surveys, the company further added that there is a 25% increase in readiness for adoption of SaaS-oriented PLM solutions since the beginning of COVID-19 crisis.
Arena Solutions’ buyout will assist PTC in providing its customers with a comprehensive SaaS solutions that encompasses both computer-aided design (CAD) and PLM offerings. Arena Solutions’ buyout will complement PTC’s earlier acquisition of Onshape.
In October 2019, PTC acquired Onshape for $470 million (net of cash acquired) to augment its Creo and Windchill products with improved SaaS capabilities. Creo is PTC’s flagship 3D CAD product, while Windchill software is the company’s important PLM product.
Headwinds Remain
PTC is bearing the brunt of macroeconomic weakness induced by the coronavirus crisis. The sluggish IT spend among small- and medium-sized businesses (SMBs) owing to coronavirus-triggered macroeconomic weakness is likely to negatively impact the demand for its offerings, at least in the near term.
Given the alluring revenue potential, the competition in the PLM market is intensifying and it is a concern for PTC. Some of the well-known players in the PLM space include Autodesk (ADSK - Free Report) , Oracle (ORCL - Free Report) , and SAP SE (SAP - Free Report) .
Currently, PTC caries a Zacks Rank #5 (Strong Sell).
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Image: Bigstock
PTC Inc (PTC) Announces Buyout of Arena Solutions for $715M
PTC Inc. (PTC - Free Report) announced the buyout of Arena Solutions, Inc. to capture a larger share of the software as a service (SaaS)-based product development market, especially among midmarket customers.
Headquartered in Foster City, CA, Arena Solutions is a privately-held company that specializes in providing cloud-based SaaS product lifecycle management (PLM) applications solutions and product-centric quality management system (QMS) solutions.
Arena Solutions’ SaaS offerings enable customers to optimize product development process as well as improve supply-chain relationship and augment closed-loop quality processes. The company has more than 1,200 customers across verticals like medical device industries, high and electronics.
The acquisition of Arena Solutions will be accretive to PTC’s financials beginning from fiscal 2022 and beyond. However, PTC added that the transaction will not contribute to its cash flow from operations and free cash flow targets for fiscal 2021. The company expects to report $365 million as cash flow from operations and $340 million as free cash flow for fiscal 2021.
PTC Inc. Price and Consensus
PTC Inc. price-consensus-chart | PTC Inc. Quote
PTC added that Arena Solutions is expected to register a double-digit year-over-year growth in annualized recurring revenues (ARR) and reach $50 million for 2020.
PTC will pay $715 million for the acquisition of Arena Solutions, which will be funded by utilizing cash in hand and the amount available under the existing credit facility. The buyout, subject to regulatory and customary conditions, is slated for closure in the company’s second quarter of fiscal 2021.
PTC added that it will divulge more details about the transaction at its upcoming Investor Day virtual meeting to be held on Dec 15, 2020.
Arena Acquisition to Boost Presence in SaaS based PLM Market
Per a Grand View Research report, the PLM market is expected to witness a CAGR of 6.2% between 2020 and 2025. PLM refers to efficient management of information throughout the product lifecycle on real-time basis, while offering cost savings and improving time to market for new products, added the report.
PTC noted that the COVID-19 crisis has accelerated the adoption of SaaS-based solutions. Citing PTC customer surveys, the company further added that there is a 25% increase in readiness for adoption of SaaS-oriented PLM solutions since the beginning of COVID-19 crisis.
Arena Solutions’ buyout will assist PTC in providing its customers with a comprehensive SaaS solutions that encompasses both computer-aided design (CAD) and PLM offerings. Arena Solutions’ buyout will complement PTC’s earlier acquisition of Onshape.
In October 2019, PTC acquired Onshape for $470 million (net of cash acquired) to augment its Creo and Windchill products with improved SaaS capabilities. Creo is PTC’s flagship 3D CAD product, while Windchill software is the company’s important PLM product.
Headwinds Remain
PTC is bearing the brunt of macroeconomic weakness induced by the coronavirus crisis. The sluggish IT spend among small- and medium-sized businesses (SMBs) owing to coronavirus-triggered macroeconomic weakness is likely to negatively impact the demand for its offerings, at least in the near term.
Given the alluring revenue potential, the competition in the PLM market is intensifying and it is a concern for PTC. Some of the well-known players in the PLM space include Autodesk (ADSK - Free Report) , Oracle (ORCL - Free Report) , and SAP SE (SAP - Free Report) .
Currently, PTC caries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Download Marijuana Moneymakers FREE >>