PTC to acquire cloud-based provider ServiceMax for $1.5 billion

PTC, a Boston-based company that provides Internet of things (IoT), augmented reality (AR), and collaboration software, announced Thursday it has agreed to buy cloud provider company ServiceMax for $1.46  billion in cash.

The transaction will be funded in two stages, with $808 million paid at closing expected in early January and $650 million paid in October next year. PTC said the acquisition will enable the company to expand its portfolio of product lifecycle management offerings. The transaction is expected to be accretive to PTC’s fiscal 2023 cash flow. ServiceMax is expected to generate approximately $160 million in ARR for PTC’s Q2’23.

We covered ServiceMax two years after the cloud provider raised $80 million in funding led by new investor Salesforce Ventures and existing investor Silver Lake to transform and advance the future of its field service.

Founded in 2007 by Athani Krishnaprasad, Hari Subramanian, and Neil Barua, the Pleasanton, California-based ServiceMax is one of the global leaders in Service Execution Management, a software category that includes both Field Service Management and Asset Service Management. Built on the Salesforce platform, ServiceMax offers a suite of field service applications that provide customers with a complete view of their assets, enabling them to run more profitable, efficient service operations in complex, asset-intensive industries.

“ServiceMax and PTC have a longstanding relationship rooted in the common profile of our customers, the natural synergies of our products, and a shared understanding of the importance of product data at different stages of the lifecycle,” said Neil Barua CEO, ServiceMax. “PTC has a strong and consistent track record of success, and now following the growth and innovation we’ve achieved during our partnership with Silver Lake, we’re excited for the ServiceMax team to strengthen the service offerings of PTC’s digital thread and closed-loop PLM portfolio.”

Field service management, the management of a company’s resources employed at or en route to the property of clients, rather than on company property, is critical to the success of OEMs, operators, and 3rd-party service providers.

The two companies have been partners since 2015. They both provide cloud-based software platforms for equipment manufacturers and service providers. They also work with manufacturers of complex, highly configured products such as industrial products and aerospace to track and monitor products throughout their lifecycle.

“PTC is poised to be the only company that will be able to offer manufacturers this comprehensive view of their products at each stage of the lifecycle,” said PTC Chief Executive Jim Heppelmann.