PTC Acquires CoCreate31 Oct, 2007
Company expects purchase to broaden its portfolio of product lifecycle management and CAD modeling solutions for the MCAD industry.
PTC announced that it has entered into a definitive agreement to acquire Sindelfingen, Germany-based CoCreate for approximately $250 million.
The acquisition reportedly will enable PTC, a provider of product development software, to broaden its portfolio and offer support for a comprehensive range of modeling techniques throughout the MCAD industry. The acquisition is expected to close in December 2007, subject to customary conditions including regulatory approval.
PTC states that it plans to integrate the CoCreate modeling solutions into its Product Development System (PDS) and offer CoCreate customers additional product development capabilities, including engineering calculations, dynamic publishing, visualization, high-speed machining, and enterprise content and process management.
"PTC is dedicated to providing product development organizations with the solutions that they need to be successful in an incredibly competitive global marketplace," said C. Richard Harrison, president and CEO of PTC. "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 PTC's product portfolio while also contributing in a meaningful way to earnings and operating margin. The satisfaction of CoCreate's customers will be a major focus for PTC. 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."
Jim Heppelmann, executive vice-president and chief product officer of PTC, added, "The combination of PTC and CoCreate products will enable PTC to offer the manufacturing industry the flexibility to select the most appropriate modeling software for their business requirements from a financially secure, trusted worldwide product development technology leader. In line with industry trends, we expect the majority of our modeling business will continue to come from our flagship parametric solution, Pro/ENGINEER. CoCreate customers who prefer explicit modeling will now have a complete product development system as a viable option."
PTC states that it plans to finance the acquisition and related expenses with a combination of $50 million cash and $210 million debt from its existing credit facility. Wachovia Securities reportedly acted as exclusive financial adviser to PTC in the transaction.
In other news, PTC announced total revenues of $266.7 million for the fourth quarter, which ended September 30, 2007, up 9% from the same period last year. Total fourth-quarter license revenue was $96.1 million, 14% higher than the same period last year.
For fiscal year 2007, PTC reported total revenues of $941.5 million, up 10% from fiscal year 2006. Total license revenue for fiscal year 2007 was $296.1 million, a 12% increase from fiscal year 2006. Cash and cash equivalents were $263 million at the end of fiscal 2007, up from $260 million at the end of the third fiscal quarter of 2007, ahead of expectations. The company reports its long-term goal is $1.5 billion in revenue and 22% operating margin by 2010.