PTC on the go to Acquire ServiceMax to Strengthen Field Service Management

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Published on 11/21/2022

 

PTC on the go to Acquire ServiceMax

PTC, a software company, specialising in the digital aspect of product lifecycle management, announced the $1.46 billion acquisition of ServiceMax, a cloud-native field service management software maker.

Regulatory permission is required for PTC's proposed acquisition of ServiceMax, which is expected to occur in early January 2023. In 2019, General Electric, the parent company of ServiceMax, sold it to private equity firm SilverLake.

After purchasing Intland in May, the maker of the Codebeamer Application Lifecycle Management (ALM) cloud-ready software product suite, ServiceMax, is PTC's second acquisition of the year.

Acquisition After Long Continued Partnership Since 2015

PTC and ServiceMax have partnered since 2015, wherein both the companies have made highly customised, complicated goods for aerospace, industrial products, medical devices, and related industries. For these manufacturers, preserving product performance, extending product lifecycles, raising customer happiness, promoting revenue development, and boosting profitability are strategic aspects of their business.

The Salesforce platform is the foundation for ServiceMax's entire portfolio of cloud-native FSM capabilities. The suite covers scheduling and dispatching technicians, producing and tracking work orders, and managing all information regarding serviced products. Salesforce's customer relationship management (CRM) system and ServiceMax's capabilities work together seamlessly to provide an understanding of the needs and items that customers purchase.

The FSM capabilities of ServiceMax will seamlessly integrate with PTC's full digital thread portfolio. From PTC's Creo and Windchill products, it can use product definition data. PTC's Arbortext software and Servigistics software have service parts management and technical publishing capabilities. ThingWorx solutions from PTC can leverage IoT and digital twin capabilities, and Vuforia software from PTC can leverage augmented reality (A.R.) capabilities.

Transaction Details

PTC's acquisition is expected to be paid for in two instalments: $808 million at closure and $650 million in October 2023. The funding will come from cash reserves, a new $500 million term loan, and borrowing from an already-existing credit facility.

For PTC's Q2 '23, ServiceMax is anticipated to provide about $160 million in Annual Recurring Revenue (ARR). The deal will help PTC reach its goals for free cash flow, adjusted free cash flow, and cash flow from operations in FY '23. In this deal, PTC has taken financial advice from Centerview Partners LLC.

PTC reported its financial results for the fiscal year 2022 earlier this month. The company recorded sales of $1.93 billion for the year that ended on September 30, an increase of 7% from the previous year. The company projects sales of between $1.91 billion and $1.99 billion for the fiscal year 2023.

About ServiceMax

ServiceMax is a well-known developer in product-focused, cloud-native field service management software. ServiceMax uses the Salesforce platform to provide a full spectrum of field service management features. The management of all pertinent product information, such as the asset description, serial number, location, and service history, as well as the creation and management of work orders and the scheduling and dispatching of technicians.

About PTC

PTC offers software solutions that help international firms improve operational effectiveness, boost employee productivity, and realise the double-digit impact. PTC offers customers choices in how their technology can be implemented to accelerate digital transformation on-premises, in the cloud, or via its pure SaaS platform along with a vast partner network.

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Peter Daniels
Peter Daniels is the lead journalist for InsiderApps.com


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