Product lifecycle management software developer PTC said Oct. 31 it plans to buy CoCreate Software for $250 million. The deal, which is expected to close in December, will help PTC offer a full range of modeling approaches—parametric, explicit, derived and 2D—to its manufacturing customer base.
With the acquisition, PTC plans to broaden its portfolio of PLM and CAD (computer aided design) products to include a fairly comprehensive suite of modeling tools that offer product development capabilities like engineering calculations, dynamic publishing, visualization, high-speed machining, and enterprise content and process management. PTC, of Needham, Mass., will integrate CoCreates modeling software into its Product Development System.
CoCreate, of Sindelfingen, Germany, also brings a hefty customer roster to PTC. The company has about 5,000 customers, including the likes of Agilent, Canon, Fisher Controls, Fujitsu, Hewlett-Packard, Olympus, and NEC. CoCreate also has 280 employees and annual revenues of about $80 million.
"As experts in product development, we are constantly evaluating technologies that address the business challenges of our customers. This acquisition is compelling as it enhances PTCs product portfolio while also contributing in a meaningful way to earnings and operating margin," PTC President and CEO C. Richard Harrison said in a statement. "We are committed to protecting and enhancing the investment that these customers have made in CoCreate solutions and we plan to also offer additional complementary PTC solutions in order to bring them even more value."
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The CoCreate acquisition is another step in a rapidly consolidating PLM landscape. In the last year and a half, Dassault bought MatrixOne, Siemens bought UGS and Oracle bought Agile Software. And while there is a boatload of smaller PLM vendors in the market, the major players have consolidated to three: PTC, UGS (itself a compilation of acquisitions) and Dassault. Now ERP (enterprise resource planning) giants SAP and Oracle are in the game, too, increasing competition even more.
In addition to announcing the acquisition, PTC reported its fourth quarter 2007 revenue, up 9 percent for the same year-ago period, to $266.7 million, and full year revenues, up 10 percent from 2006, to $941.5 million.
PTC said fourth-quarter license revenues grew 14 percent from the same year-ago period, to $96.1 million. Total license revenues for the fiscal year were $296.1 million, up 12 percent from 2006.
PTC also said Oct. 31 it will restate its previously issued financial statements between 2001 to 2006, with respect to transactions involving at least one major customer, Toshiba. According to PTC officials, the transactions "appear to have been related to an allegedly fraudulent scheme conducted by Toshiba employees." The revenue impact: $41 million for the four years between 2001 and 2006, and $8 million for fiscal 2006.
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