NEEDHAM, MASS. – PTC (Nasdaq: PTC) today announced it has signed a definitive agreement to acquire privately-held Axeda Corporation, a pioneer in the development of solutions to securely connect machines and sensors to the cloud, for approximately $170 million in cash. Axeda’s technology innovation, extensive customer base, and powerful partnerships directly complement the PTC ThingWorx business, and will accelerate PTC’s ability to deliver best-in-class solutions across the entire Internet of Things technology stack. Subject to satisfaction of customary closing conditions and certain regulatory approvals, the transaction is expected to be completed in PTC’s fiscal Q4 2014.
Secure connectivity, and the ability to leverage machine data to create new business value, are critical components of the Internet of Things (IoT) technology stack and are in increasing demand as more companies pursue a smart, connected product strategy. An innovator in the IoT technology market, Axeda currently serves more than 150 customers, processing hundreds of millions of machine messages daily across multiple industry sectors. The company has a broad partner ecosystem that includes leading mobile network operators, edge device and design-in device makers, systems integrators, and business systems/analytics providers and its technology leadership led to several strategic OEM agreements with leading IoT technology and solution providers.
“The world we live in is changing around us, and the pace of that change is accelerating as more and more machines, sensors, and products connect via the Internet to their makers, to their operators, and to each other,” said PTC president and CEO Jim Heppelmann. “In recent years, products have become tremendous sources of intelligence as they have been increasingly instrumented with sensors. Until now, manufacturers have been constrained in their ability to securely collect that data and make sense of it all. Axeda’s innovative approach to machine connectivity delivers exactly what manufacturers need to capitalize on the massive amounts of data now available from their smart, connected products.”
Core to Axeda’s IoT technology is the ability to enable companies to establish secure connectivity and remotely monitor and manage a wide range of machines, sensors, and devices. The Axeda Machine Cloud Service includes machine-to-machine (M2M) and IoT connectivity services, software agents, and toolkits that enable companies to connect their products to the cloud using virtually any communication channel (e.g. cellular networks, the Internet, WiFi, or satellite). Axeda’s end-to-end security strategy covers all levels of the IoT technology stack, including network, application, user, and data security. Axeda has attained ISO 27001:2005 certification, supporting the company’s focus on delivering the highest levels of security, performance, and availability.
In addition, the Axeda Connected Machine Management application set empowers companies to remotely monitor and service products, including the ability to deliver over-the-air software updates.
“Axeda was early to see the potential of the IoT space and we consider ourselves a true market innovator,” said Todd DeSisto, president and CEO, Axeda. “Our technology solutions enable companies to connect to, and manage machines and the data they generate to create new business opportunities. We share PTC’s vision for the transformative power of smart, connected products and are excited to contribute to PTC’s leadership position in this fast growing market.”
In the IoT era, PTC’s customers are developing increasingly smart and connected products which can generate value in new ways as streams of real-time operational data are captured, analyzed, and shared to deepen a company’s understanding of its products’ performance, use, and reliability. PTC intends to leverage the Axeda technology portfolio to complement its existing ThingWorx® rapid application development platform and its existing service lifecycle management (SLM) and extended product lifecycle management (PLM) solution portfolio.
“In less than a year, PTC has quickly scaled to a position of leadership in helping manufacturers seize the opportunity presented by a smart, connected world,” concluded Heppelmann. “We believe the combination of ThingWorx, Axeda and our existing SLM and PLM solution portfolio, will establish PTC as the only provider of true closed-loop lifecycle management solutions for the Internet of Things.”
The acquisition is expected to add $25 million to $30 million of revenue in FY’15. PTC expects to draw on its credit facility to finance the transaction. Axeda has approximately 160 employees primarily located in the United States.
PTC (Nasdaq: PTC) enables manufacturers to achieve sustained product and service advantage. PTC’s technology solutions help customers transform the way they create, operate, and service products for a smart, connected world. Founded in 1985, PTC employs approximately 6,000 professionals serving more than 28,000 businesses in rapidly-evolving, globally-distributed manufacturing industries worldwide. Get more information at www.PTC.com.
Forward Looking Statements and Risks
Statements in this press release about the expected timing and completion of the acquisition, the opportunities created for us and our customers by the proposed acquisition and the Internet of Things, and the expected revenue contribution from Axeda in FY’15 are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially. Such risks and uncertainties include the following: regulatory approvals may not be received when expected and/or at all and closing conditions may not be satisfied when expected or at all, resulting in a delay in closing or an inability to complete the acquisition of Axeda; customers may not adopt our IoT solutions when or at the rates we expect; we may be unable to operate the Axeda business to generate the expected revenue; any technology leadership position we attain may not generate the revenue we expect; and the opportunities expected to be created by the Internet of Things may not materialize as quickly or as we or others expect; as well as other risks and uncertainties described in reports we file with the Securities and Exchange Commission, including our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q.
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