PTC announced that it has signed a definitive agreement to acquire Onshape, creators of a Software as a Service (SaaS) product development platform that helps unite computer aided design (CAD) with data management and collaboration tools, for approximately $470 million, net of cash acquired. The acquisition is expected to help accelerate PTC’s ability to attract new customers with a SaaS-based product offering and position the company to capitalize on an industry transition to SaaS. Pending regulatory approval and satisfaction of other closing conditions, the transaction is expected to be completed in November 2019.
This acquisition is the next step in PTC’s overall evolution to a recurring revenue business model, the first step of which was the company’s transition to subscription licensing, completed in January 2019. The SaaS model, while relatively nascent in the CAD and PLM market, is becoming an industry best practice across most other software domains.
For customers, the SaaS model helps to enable faster work, improved collaboration and innovation, with lower up-front costs and without IT infrastructure to administer and maintain. For software providers, the SaaS model has helped to generate a more stable and predictable revenue stream, which can increase customer loyalty as customers can benefit from earlier adoption of technology innovations, and enable expansions into new segments and geographies.
Onshape will operate as a business unit within PTC, with current management reporting directly to PTC President and CEO Jim Heppelmann.