The acquisition will enable Boston-based PTC to deliver a complete CAD + PLM SaaS solution, according to the company. PTC expects the acquisition to be completed in its fiscal second quarter of 2021.
Arena Solutions (Foster City, Calif.) serves more than 1,200 customers across the electronics, high-tech and medtech industries, including Nutanix, Peloton, Sonos and Square. PTC officials believe Arena will broadly extend PTC’s presence in the mid-market, where SaaS solutions are becoming the standard, according to a news release.
“A year ago, PTC entered the SaaS world for product development software with our acquisition of Onshape,” said PTC president & CEO Jim Heppelmann in the release. “That move reflected our strong conviction that our market is nearing a tipping point in its willingness to adopt SaaS technology, following the trend seen in many other software markets. The effects of COVID-19 have dramatically accelerated this inevitable shift, with PTC customer surveys indicating a 25% increase in readiness for SaaS PLM since the pandemic started. We expect the acquisition of Arena will significantly extend our leadership position as we continue to redefine the future of our industry.”
Arena Solutions is expected to end calendar year 2020 with approximately $50 million in annualized recurring revenue, reflecting double-digit growth over 2019.
“As the SaaS PLM pioneer, we were first to see that engineers and product developers would benefit from a new paradigm in the way they collaborate and drive product innovation,” said Arena Solutions president and CEO Craig Livingston. “We were ahead of the market in the early days, but in the past several years we’ve seen an acceleration of market receptivity and demand. This acquisition validates our original vision, and we are pleased to be joining an established leader in CAD and PLM capable of hastening the movement of our market to SaaS.”
The transaction is expected to be neutral to PTC’s fiscal 2021 cash flow and accretive to fiscal year 2022 and beyond. The transaction will be funded with cash-on-hand and amounts borrowed under PTC’s existing credit facility, the company said.