PTC Inc ( PTC Quick Quote PTC - Free Report) has announced an agreement to acquire cloud-based field service management (FSM) software company - ServiceMax - for $1.46 billion. The transaction is subject to regulatory and customary approvals, is expected to close in January 2023.
ServiceMax provides FSM services built on the Salesforce platform which includes all information pertaining to serviced products like description, serial number, service history and scheduling and dispatching technicians etc.
The deal will be financed utilizing cash in hand and the amount borrowed under the company’s existing credit facility, along with a new $500 million term loan. Subject to regulatory and customary conditions, the transaction is expected to close in early January 2023.
The acquisition price will be broken in two instalments, where $808 million will be paid in January 2023 and $650 million in October 2023.
Since 2015, PTC and ServiceMax have collaborated numerous times to offer field service to producers of complicated, highly customized goods for the aerospace, industrial products, medical device and related sectors.
The integration of ServiceMax is expected to strengthen PTC’s closed loop product lifecycle management (PLM) solutions by providing enterprise asset management and FSM companies with monitoring and servicing product record after the product moves into customer use, added the company.
The complete service history provided by ServiceMax, along with detailed usage information from PTC’s Internet of things solutions will complement the full digital product definition from PTC’s computer-aided design and PLM solutions.
The acquisition is expected to improve PTC's second-quarter ARR results by approximately $160 million. For fiscal 2023, the company expects ARR to be $1.730-$1.790 billion, which indicates a rise of 10-14% year over year at constant currency.
Strategic acquisitions have played a pivotal part in developing the company’s business in the last few years.
In May 2022, the company
completed the acquisition of Germany-based Intland Software for $280 million. Intland Software’s product portfolio is an essential component of the company’s Digital Thread Strategy and complement PTC’s portfolio of PLM and model-based systems engineering solutions.
Prior to that, 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 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.
At present, PTC carries a Zacks Rank #3 (Hold). Shares of PTC have gained 5.6% against the
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