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PTC Set to Acquire Intland Software to Boost ALM Portfolio

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PTC (PTC - Free Report) recently announced that it will acquire Germany-based Intland Software for $280 million.

The deal will be financed utilizing cash in hand and the amount borrowed under the company’s existing credit facility. Subject to regulatory and customary conditions, the transaction is expected to close in the company third quarter of fiscal 2022.

Based in Stuttgart, Intland Software develops and markets the Codebeamer Application Lifecycle Management (“ALM”) software products, which includes a cloud-ready and a fully integrated solution, noted PTC.

Codebeamer has simple user interface that offers customers “requirements, risk and test-management capabilities”. The software is designed to support modern software development and combines it with the best DevOps and source code management tools, highlighted PTC. The company has a diverse customer base across various verticals like life sciences, consumer electronics, automotive and aerospace and defense.

The integration of Intland Software is expected to boost PTC’s ALM portfolio and help it attract new clients within the “safety-critical” and regulated verticals. Intland Software’s product portfolio will be an essential component of the company’s Digital Thread Strategy and complement PTC’s portfolio of product lifestyle management and model-based systems engineering solutions, added the company.

PTC Inc. Price and Consensus

 

PTC Inc. Price and Consensus

PTC Inc. price-consensus-chart | PTC Inc. Quote

 

PTC will be offering Codebeamer as a standalone solution and will also combine it with its Windchill and Arena PLM solutions.

Strategic acquisitions have played a pivotal part in developing the company’s business in the last few years. In January 2021, PTC completed the acquisition of Arena Solutions, Inc for $715 million. Arena Solutions provides cloud-based SaaS PLM applications solutions and product-centric quality management system (QMS) solutions. Arena Solutions’ buyout complements 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.

However, adverse foreign currency exchange rates, escalated integration risks from buyouts, stiff competition in the CAD market and high debt burden are major concerns.

At present, PTC carries a Zacks Rank #4 (Sell). Shares of PTC have lost 29.5% compared with the industry’s increase of 2.3% in the past year.

Key Picks

Some better-ranked stocks from the broader technology sector are Broadcom (AVGO - Free Report) , Apple (AAPL - Free Report) and Intuit (INTU - Free Report) . All the stocks carry a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

The Zacks Consensus Estimate for Broadcom’s fiscal 2022 earnings is pegged at $35.67 per share, up 7.6% in the past 60 days. AVGO’s long-term earnings growth rate is pegged at 14.5%.

Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, with the average being 1.9%. Shares of AVGO have increased 31.3% in the past year.

The Zacks Consensus Estimate for Apple’s fiscal 2022 earnings is pegged at $6.16 per share, up 0.2% in the past 60 days. The long-term earnings growth rate is pegged at 12.5%.

Apple’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, with the average being 20.3%. Shares of AAPL have rallied 26.7% in the past year.

The Zacks Consensus Estimate for Intuit fiscal 2022 earnings is pegged at $11.66 per share, up 0.3% in the past 60 days. The long-term earnings growth rate is 15.4%.

Intuit earnings beat the Zacks Consensus Estimate in three of the last four quarters, with the average being 16.7%. Shares of INTU have gained 18.5% in the past year.

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