July 11, 2005
PTC Acquires Arbortext For Associative Enterprise Publishing
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PTC announced that it has entered into a definitive agreement to acquire Arbortext, Inc., a recognized leader in the emerging Dynamic Enterprise Publishing market, for $190 million in cash. Arbortext serves 1,700 customers worldwide in multiple industries, including discrete manufacturing, life sciences, financial services, insurance, publishing, and government. With this acquisition, PTC will be uniquely positioned to enable customers to create, manage and dynamically publish critical information concurrently with the development of related products or services, improving time-to-market, quality, cost and customer satisfaction.
The transaction is expected to close by the end of July 2005, subject to customary conditions including regulatory approval. The transaction has been approved by Arbortext shareholders. PTC expects the acquisition will be accretive to earnings in fiscal 2006.
"For 20 years, PTC has helped more than 35,000 companies develop superior products and improve productivity in product development," said C. Richard Harrison, president and CEO of PTC. "By bringing our passion for customer success and our technology leadership to the process of dynamic enterprise publishing, we believe we will be able to accelerate our growth. The complementary PTC and Arbortext solutions will enable companies to better capture and deliver critical content that is the basis for a wide variety of upstream and downstream enterprise deliverables.
"This acquisition is a natural extension of PTC's product development system vision. Together with Arbortext, we will enable discrete manufacturing customers to manage product content and related documentation from concept through retirement," Harrison continued. "Additionally, this acquisition expands our footprint into new verticals such as pharmaceuticals, financial services, government and traditional publishing by providing these customers with a complete solution for highly personalized product or service offerings."
leader in the emerging Dynamic Enterprise Publishing software market, and predicts this market will grow more than 25% annually to over $1 billion in 2009.
Companies of all sizes in all industries create products and services that require vast quantities of documentation such as engineering specifications, user manuals, training materials, promotional materials, product labels, policies and procedures, contracts, service manuals, product catalogs and regulatory submissions. These documents must also meet the specific requirements of multiple audiences, such as customers, employees, partners, investors and regulators. Publishing critical product and service information through an ever-increasing array of media (electronic, print and Web) is one of the most challenging processes companies have yet to optimize.
Arbortext's technology approach is completely different from that of traditional tools, and significantly reduces waste and duplication inherent in the publishing process today."
information. The combined solutions will provide customers with a new breed of innovative information delivery vehicles that create highly dynamic and personalized user experiences. At the same time, PTC will leverage the openness and flexibility inherent in our solutions to work with a variety of information sources, content management solutions and other enterprise applications."
PTC and Arbortext believe that their mutual customers, such as Solar Turbines Incorporated, should benefit significantly from an integrated solution. "Solar Turbines Incorporated is very supportive of a strategy to integrate Arbortext with our design and data control solutions," said Martin Habel, manager of Technical Documentation, Solar Turbines Incorporated. "We see a strong value in aligning these processes."
This is a somewhat surprising, but not totally unexpected acquisition by PTC, since it seems to dovetail with some other recent announcements surrounding other acquisitions and overall corporate direction.
Arbortext will introduce PTC into new markets and PTC will provide new sales and support channels for Arbortext, so it works both ways.
Just check out the list of current Arbortext customers - Abbott Laboratories, American Express Financial Services, Audi, Boeing, Bombardier, British Aerospace, Caterpillar, DaimlerChrysler, Ericsson, Ford, General Electric, GlaxoSmithKline, GM, IBM, Thomson Publishing, Lucent, Nokia, Nortel Networks, Oracle, Pfizer, Ricoh, Sun Microsystems, Toyota, United Airlines, Volkswagen, Volvo and the US Department of Defense including the Navy, Air Force, Army, and Marine Corps.
Since, the PTC and Arbortext product lines are complementary, there is virtually no capability overlap. With this acquisition, PTC can deliver Arbortext's products in conjunction with its product development system to PTC's existing customers. For example, manufacturing companies will now be able to develop assembly instructions, maintenance manuals, test plans, and owner's manuals, concurrently with product development. These documents will be associative with the product model, so product changes are immediately reflected in associated documents.
Publishing, especially 3D, has become a really big deal in the past few years, as evidenced by the number of companies that have gotten into it, so this acquisition seems like a good fit for both parties involved. I tend to think that we'll see some interesting things come out of this acquisition relatively soon with the new version of Windchill that was recently released, and the new version of Pro/ENGINEER Wildfire that will be released sometime in the next several months.
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