May 01, 2006
PTC to Acquire Mathsoft
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by Jeff Rowe - Contributing Editor
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PTC announced that it has signed a definitive agreement to acquire Mathsoft Engineering & Education, Inc. (Mathsoft) for $63.25 million in cash. Mathsoft is the provider of Mathcad, software that helps engineering organizations create, automate, document and reuse engineering calculations critical to the product development process, as well as other mathematics-driven processes. With annual revenue of approximately $20 million and over 250,000 professional users worldwide, Mathcad is the industry standard for authoring and documenting engineering calculations in industries such as discrete and process manufacturing, architecture, engineering and construction, government and education. With
this acquisition, PTC will expand its computer-aided design, manufacturing and engineering (CAD/CAM/CAE) solutions with unique predictive engineering capabilities that will help customers deliver optimized products sooner, with higher quality and improved knowledge capture. The acquisition, which is subject to regulatory approval and other customary closing conditions, is expected to close in early May.

"Mathsoft will be an important addition to PTC, as it will expand both our product offering and our addressable market," said C. Richard Harrison, president and chief executive officer of PTC. "CAE is one of the faster-growing segments of the product lifecycle management market. PTC is staking out a unique position within this market segment by arming engineers with tools used upfront in the engineering process. This approach delivers greater value to customers because it helps optimize the entire engineering process."

Mathsoft's approach to CAE, which helps predict engineering parameters before design begins, will enable customers to optimize designs and will complement PTC's existing structural, thermal, fatigue and mechanism analysis solutions used to validate Pro/ENGINEER designs.

"Calculations are at the heart of engineering, driving critical decisions that determine competitive advantage," said Chris Randles, chairman, president and chief executive officer of Mathsoft. "Today, many organizations still perform and manage engineering calculation work by hand, on calculators, in spreadsheets, or with programming languages. These outdated methods put critical intellectual property at risk, limit information reuse and can create confusion. With Mathsoft solutions, engineering organizations are documenting their engineering work as they go, creating, capturing and sharing critical calculations to leverage and enhance engineering and product development

Computer-aided design solutions are excellent for documenting design geometry, but without an understanding of the underlying calculations that drive critical parameters, they do not completely capture engineering intent. By complementing and extending PTC solutions with those from Mathsoft, PTC will be the first company to address this customer challenge to improve product quality, knowledge reuse and traceability of engineering calculations and turn them into corporate assets. This is particularly important for organizations with development processes that are complex, global, highly regulated, or those whose critical calculation knowledge base resides solely with individual engineers.

PTC and Mathsoft share over 900 customers. Vetco International, a leading supplier of products and services to the upstream oil and gas industry, uses solutions from PTC and Mathsoft to help bring innovative products to market. "In the upstream oil and gas business, delivering products with a strong focus on quality and reliability is of the utmost importance," said Paul Krueger, vice president and chief information officer of Vetco International. "We use both Pro/ENGINEER and Mathcad to help us design and develop these products. One of the key benefits of this acquisition will be the integration of Mathcad into the PTC suite of products, as it will help us further optimize
and improve key engineering processes across our product lifecycle."

Once the acquisition closes, customers will continue to be able to leverage Mathcad as a stand-alone solution, or as an integral part of PTC's Product Development System. Calculations authored and documented in Mathcad can predict critical parameters that will drive Pro/ENGINEER designs. Similarly, Pro/ENGINEER parameters can be fed into Mathcad to perform supplementary engineering calculations. Designs driven with Mathcad can then be validated using Pro/ENGINEER Mechanica or other CAE applications. Additionally, institutional knowledge captured in XML-based Mathcad documents can be managed, cross-referenced, configuration controlled and reused via Windchill. Finally, technical documents
become richer and deliver greater value when calculations, text and images are assembled and published dynamically with Arbortext.

"The powerful combination of Mathsoft and PTC solutions will significantly reduce the number of iterations and physical prototypes necessary to achieve product confidence, and also will improve an organization's ability to capture and reuse information for a variety of downstream uses," said Jim Heppelmann, executive vice president and chief product officer of PTC. "PTC is also dedicated to supporting Mathsoft customers in industries outside of PTC's traditional customer base by delivering the value from Mathsoft solutions necessary for their continued success. PTC has a proven track record of working with multiple vendors to support system openness and heterogeneity to
benefit our customers."

"Mathcad is a strategic engineering design and analysis tool for us," said Andre Pavlov, assistant state structural design engineer for the Florida Department of Transportation. "We are delighted to see that Mathsoft's market leadership has been recognized by such a large and well-known leader in engineering design and development software. We expect that the combination of Mathsoft's ingenuity and PTC's strength and scale will benefit users of Mathcad in all areas of engineering."

Based in Cambridge, Massachusetts, Mathsoft has 130 employees in seven countries including the United States, United Kingdom, Germany and Japan. In addition, Mathcad is sold and supported in more than 50 countries through the Mathsoft international distributor network. The transaction has been approved by the requisite vote of Mathsoft shareholders, including its largest investor, Edison Venture Fund.

The consolidation of the technical software market continues with PTC's acquisition of Mathsoft, and is probably a good thing for both parties involved, as well as their respective customers.

Admittedly, a niche product, Mathcad is maybe not as "niche" as you might think. The company's flagship product has been around over 20 years and has quite a following for automating mathematical notation and calculations.

In the past, like many other engineers, I'd used spreadsheets as my primary means for entering engineering calculations, because, well, it was inexpensive and was adequate as long as the calculations weren't too complicated. In other words, spreadsheets were okay for listing calculation results, but were really lacking when it came to formula and knowledge capture, especially for more than a couple of engineers - things got confusing, or worse, misinterpreted.

Historically, CAD, CAM, and CAE have gotten the majority of the attention in the eyes and minds of most engineers. Generally, engineering calculations took a back seat, even though they can be critical in some aspects of the product development process. Thus, enter Mathcad …

Mathcad is an engineering calculation management tool that extends far beyond spreadsheets. It is a comprehensive collection that includes a computational engine that is accessed through conventional mathematical notation (that expresses technical facts or quantities) with a full-featured word processor and graphing capabilities. You can combine computations, text, programs, and graphs in a single worksheet. It is designed with two goals - problem solving and presentation of mathematical solutions.

Mathsoft's underlying XML architecture provides an open and accessible engineering data model with publishing, collaboration, integration, and search capabilities - especially noteworthy if implemented on an enterprise basis. It also plays well with Microsoft Word, PDF, and, yes, Excel spreadsheets.

So, the acquisition of Mathsoft should prove beneficial for PTC. The trick, however in successfully absorbing Mathcad into the product mix will be determined by how well it looks, feels, behaves, and interacts with other PTC products. This has proven troublesome with some past acquisitions, but has been better addressed with more recent acquisitions, so hopefully, things will go relatively smoothly with Mathsoft.

The Week's Top 5

At MCADCafé we track many things, including the stories that have attracted the most interest from our subscribers. Below are the five news items that were the most viewed during last week.

Adobe Systems Inc. announced it has acquired Trade and Technologies France (TTF), makers of CAD data interoperability software. The acquisition will help build on the existing 3D visualization and collaboration capabilities of Adobe software and solutions for the manufacturing industry and other markets. Terms of the acquisition were not disclosed. "We're focused on delivering the benefits of Adobe software and PDF to customers in technical markets, including the manufacturing industry," said Tom Hale, senior vice president, Knowledge Worker Solutions Business Unit, Adobe. "We anticipate the acquisition of TTF will help us significantly accelerate and expand that
effort. The key technology and expertise we gain from TTF will help enable Adobe to provide manufacturing organizations even more comprehensive solutions for 3D visualization and collaboration that extend across and beyond the enterprise." TTF is a privately held company headquartered near Lyon, France. Along with the strong industry expertise of its staff, TTF's technology includes CAD software interoperability translators and software libraries for high-end 3D visualization.

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-- Jeff Rowe, Contributing Editor.


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