Schneider Electric to Acquire PTC for $22.6 Billion at a 42% Premium
Schneider Electric has agreed to acquire US industrial software company PTC in cash for approximately $22.6 billion, at a price of $205 per share and a premium of 42.3%.
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France's Schneider Electric announced its agreement to acquire American industrial software company PTC in cash for approximately $22.6 billion, at $205 per share, in the largest deal in the group's history, as reported by Reuters via RTE, with the company confirming it on its website.
The price represents a 42.3% premium over the previous stock price, raising the enterprise value of the deal to about $23.7 billion. PTC provides design and product lifecycle management software used in factories and engineering firms. The transaction is all-cash, making it more attractive to shareholders of the target company.
The deal will be funded through €5 billion to €6 billion in equity and €16 billion to €17 billion in new debt. The company expects the acquisition to close by the third quarter of 2027, subject to shareholder and regulatory approvals. The new debt constitutes the largest portion of the deal's financing, amounting to around €16 billion to €17 billion.
Schneider anticipates that the share of Software-as-a-Service (SaaS) will rise to about 24% of group revenues, with expected annual operational synergies of €250 million by the third year. The deal comes amid a wave of expansion by industrial equipment companies into software. Through this acquisition, the group aims to transition from selling hardware to selling software and recurring revenue subscriptions.
What Do These Terms Mean?
Premium: The percentage a buyer pays above the previous stock price to convince shareholders to sell.
Enterprise Value: The company's value plus its debt minus its available cash.
Software as a Service (SaaS): A model in which a customer pays a periodic subscription to use software online instead of buying it once.
Equity: Funds raised through issuing new shares or from retained earnings, which are not repaid as debt.
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