PLM vendors get busy, aim highon the M&A front
By Staff -- Manufacturing Business Technology, 8/1/2006 6:00:00 AM
There's been some high-end shopping in the product life-cycle management (PLM) software market, but this time the activity centers around vendors buying each other.
Cambridge, Mass.-based Daratech, which closely follows the PLM market, notes that deals were especially high in the first quarter of the year, with mergers and acquisitions (M&A) aimed at creating greater economies of scale, broader reach, and new opportunities to cross sell.
According to Charles Foundyller, Daratech president, "Larger companies need growth to create stakeholder value, which can be done either through sales or acquisitions."
Here's a look at recent M&A activity—either in progress, or completed—in the PLM arena:
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PTC will acquire Mathsoft, a move Daratech sees as strategic for PTC to attain greater breadth of product portfolio, access to new accounts, and the possible addition of an online store. Mathsoft's flagship Mathcad product authors and documents engineering calculations for users in discrete manufacturing and other markets.
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Adobe Systems bought French CAD data interoperability vendor TTF to extend its 3D visualization and collaboration capabilities for manufacturing and other markets. In addition to interoperability solutions, TTF offers data migration, training, software implementation, maintenance, and hotline support services.
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Dassault Systemes advanced in its move to acquire MatrixOne, which is viewed a way for Dassault to broaden its reach in product data management. In June, Dassault also bought Dynasim AB, a simulation and modeling software vendor.
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ANSYS will acquire Fluent, which offers computational fluid dynamics solutions. Daratech projects the combined entity "might be the largest pure-play CAE [computer-aided engineering] vendor in the market," going head to head with MSC Software. "Equally important, buyers will now have two large, diverse pure-play CAE vendors to choose from, each with a different market focus and product set."
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Autodesk made its second purchase in two months, acquiring Constructware, a provider of collaborative technology solutions for the construction industry—seen as a "shrewd move" in aiding Autodesk's expansion in that market. In January, the deal to acquire Alias, a leading developer of 3D graphics technology with a heavy concentration in automotive, was completed for $197 million.
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Keeping the buyers' market active in June, Agile Software made a bid for Prodika, a PLM tools vendor serving primarily the food & beverage market, for $27.5 million.
"On the PLM side, we now have four major players: UGS, Dassault, PTC, and Autodesk—all attacking segments of each others' markets," says Foundyller. As such, he adds, "None of the acquisitions were surprising. The acquisition of Fluent by ANSYS was a coup, however, as Fluent is the gold standard of computational fluid dynamics."
Similarly, Foundyller deems Dassault's earlier acquisition of Abacus as a coup, for it was the "gold standard of nonlinear analysis," he says.
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