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PTC to buy software dev't company for $100M

Posted: 29 Dec 2015     Print Version  Bookmark and Share

Keywords:PTC  Kepware  Internet of Things  IIoT  machine learning 

PTC has entered a definitive deal to acquire Kepware, a software development company that offers communications connectivity to industrial automation environments. The agreement is valued at about $100 million, plus up to an additional $18 million based on achievement of certain strategic initiatives and financial results.

The acquisition will enhance PTC's portfolio of Internet of Things (IoT) technology, and accelerate the company's entry into the factory setting and Industrial IoT (IIoT).

Founded in 1995 and located in Portland, Maine, Kepware serves customers in more than 120 countries in such industries as manufacturing, oil and gas, building automation, and power and utilities. The company's flagship product, KEPServerEX, connects disparate devices and control systems, providing users with a single source of industrial data.

Kepware's KEPServerEX will become a strategic component of the PTC ThingWorx IoT technology platform. Once the companies' products are integrated, machine data will be able to be aggregated into the PTC ThingWorx platform, integrated with an array of internal and external information, and then automatically analysed using ThingWorx machine learning capabilities. The integration will allow organisations to gain tremendous enterprise-wide insight and to proactively optimise mission-critical processes, enabling them to improve operational performance, quality, and time to market.

In its June 2015 research report, titled 'The Internet of Things: Mapping the Value Beyond the Hype,' the McKinsey Global Institute identified the factory as one of the largest sources of potential value to be realised from the adoption of the IoT. PTC has established a dedicated business segment and has formed a strategic alliance with GE to pursue this brilliant factory opportunity. The acquisition of Kepware is intended to complement the alliance with GE.

Kepware and PTC share many common customers that will be able to realise value from the acquisition. Industrial environments leveraging Kepware technology will be able to benefit from the added breadth of capabilities available in the PTC ThingWorx IoT technology platform. The acquisition of Kepware will also provide a fast-to-value connectivity option for PTC customers to gain visibility into data from a vast range of industrial controls and production equipment, enabling them to kick-start their smart, connected factory initiatives, the company indicated.

Over the past 12 months, Kepware generated nearly $20 million in revenue. PTC expects to draw on its credit facility to finance this transaction and expects Kepware to be neutral to its FY'16 non-GAAP EPS. The transaction is expected to close in early 2016, subject to customary closing conditions, including regulatory approval. PTC intends to maintain the Kepware partner ecosystem and to continue developing and enhancing the Kepware technology, once acquired.

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