PTC to Acquire Mathsoft - Frequently Asked Questions

On April 26, 2006, PTC (Nasdaq: PMTC) announced it entered into a definitive agreement to acquire privately held Mathsoft, which provides engineering calculation solutions to commercial, government, and education markets worldwide. The acquisition is expected to cost approximately $63 million. This FAQ is intended to help PTC and Mathsoft customers, partners, media and shareholders understand details about the transaction. Once the acquisition closes and integration begins, customers and partners will receive additional information from PTC and Mathsoft.

Q: Who is PTC?
A: PTC provides leading product lifecycle management (PLM), content management and dynamic publishing solutions to more than 40,000 companies worldwide. PTC customers include the world's most innovative companies in manufacturing, publishing, services, government and life sciences industries. PTC is included in the S&P 500 and Russell 2000 indices. PTC is based in Needham, Massachusetts and has over 4,000 employees in more than 20 countries around the world.

Q: Who is Mathsoft?
A: Mathsoft Engineering & Education, Inc. pioneered engineering calculation solutions that protect engineering innovation, investments and intellectual capital while improving organizational efficiency and productivity. Mathsoft's Mathcad is the internationally recognized standard for engineering calculations and applied mathematics. Ninety percent of Fortune 1000 companies, 500 government agencies and 2,000 colleges and universities around the world use Mathsoft products to capture the strategic value in their engineering calculations. Mathsoft is privately held, headquartered in Cambridge, Massachusetts, with 130 employees in seven countries. In addition, Mathsoft products are sold and supported in over 50 counties through the Mathsoft international distributor network.

Q: What are the financial terms of the transaction?
A: PTC will pay approximately $63 million in an all-cash transaction. Other financial terms were not disclosed.

Q: When is the acquisition expected to close?
A: PTC expects the acquisition to close by early May 2006, subject to achieving regulatory approval. PTC has already received approval from Mathsoft's shareholders.

Q: Why did PTC agree to acquire Mathsoft?
A: PTC is constantly evaluating opportunities that will strengthen or expand our solutions offerings, while delivering potential for both revenue and earnings growth. Mathsoft is particularly interesting to PTC for the following reasons:

  • This acquisition will deliver value to existing PTC customers and business partners. With Mathsoft, PTC can further streamline product development time, improve product quality, and improve knowledge capture.
  • Mathsoft's Mathcad product is widely recognized as the industry standard for authoring and documenting engineering calculations in multiple vertical markets. This acquisition gives PTC a leading, complementary solution to leverage across its global distribution model within discrete manufacturing. It also helps expand PTC's addressable market into vertical markets we have not traditionally served, such as A/E/C (Architecture, Engineering, and Construction), pharmaceuticals/ chemicals and process manufacturing.
  • Mathsoft provides an opportunity to accelerate PTC's revenue and earnings growth, as Computer-Aided Engineering (CAE) is one of the faster-growing segments of the PLM market, and Mathsoft itself is growing about 15% to 20% annually.
  • Mathsoft's approach to CAE is unique in the industry and complements PTC's existing analysis solutions - together, we will provide a more complete and highly differentiated CAE solution that is relevant for many users throughout a company.

Q: How will Mathsoft solutions complement the PTC product portfolio?
A: Complementary to PTC solutions, which together represent the Product Development System, Mathsoft solutions capture valuable engineering calculations that drive a wide variety of enterprise deliverables such as documentation of engineering calculations and regulatory filings related to product development. By driving their designs with Mathsoft solutions, customers can capture the value of their engineering calculations, protect this critical knowledge from being lost over time, and reduce rework due to quality issues. Specifically:

  • Calculations authored and documented in Mathcad can predict critical parameters that will drive Pro/ENGINEER designs.
  • Pro/ENGINEER parameters can be fed into Mathcad to perform supplementary engineering calculations.
  • Designs driven with Mathcad can then be validated using Pro/ENGINEER Mechanica or other CAE applications.
  • Institutional knowledge captured in XML-based Mathcad calculations and documents can be managed, searched, cross-referenced, configuration controlled and reused via Windchill.
  • Technical documents become richer and deliver greater value when calculations, text, and images are assembled and published dynamically with Arbortext.

Q: Why is this good for both companies' customers?
A: Mathsoft extends the value of PTC's Product Development System, enabling companies to create, document, manage, and leverage engineering calculations throughout their product development process. PTC expects to deliver a tight integration between its solutions and Mathsoft solutions shortly. Joint customers will benefit from this integration by improving their ability to drive product development and process efficiencies. PTC is committed to serving all of the industries Mathsoft has served to date. Mathsoft customers can rest assured that we will continue to develop and improve Mathsoft solutions, whether customers use them stand alone, in conjunction with PTC solutions, or with other engineering applications. Furthermore, Mathsoft customers can benefit from the improved global scale and financial strength that comes along with being a part of PTC, including award-winning technical support available world-wide in local languages.

Q: How will this transaction impact PTC financially?
A: PTC believes that the acquisition of Mathsoft will help accelerate both Mathsoft and PTC revenue growth through distribution leverage and solution differentiation. Though this acquisition is expected to be slightly dilutive to earnings and operating margins in FY 2006, we do expect it to be accretive to earnings and operating margins in FY 2007.

Q: What will be the impact on the PTC and Mathsoft organizations?
A: The integration will take place throughout the remainder of fiscal year 2006. Chris Randles, chairman and CEO of Mathsoft along with key members of Mathsoft executive management staff, will be focused on helping to integrate the businesses in a way that ensures Mathsoft is positioned to continue its track record of delivering industry leading products and customer value. Mathsoft's sales and services teams will provide support to Mathsoft accounts. Account management for joint customers will be determined based on customer needs. As we integrate the businesses in the coming months, more details will be provided to PTC and Mathsoft customers.

Q: How will this acquisition affect the development of Mathsoft's product line?
A: Mathsoft's products are a natural extension of PTC's product line. PTC wants to ensure that Mathsoft continues to grow and thrive in engineering departments worldwide; therefore, PTC will continue the development and expansion of Mathsoft's product lines.

Q: Who should customers or partners contact if they have questions about the acquisition?
A: PTC and Mathsoft have developed a communications program for both companies' customers and partners. If after reviewing the information posted on both companies' websites and other communications vehicles you have remaining questions, please contact your current PTC or Mathsoft account representative.

Q: Who should media or analysts contact if they have questions about the acquisition?
A: Please contact one of the following:
Media inquiries - Nicole Rowe, nrowe@ptc.com, 781-370-6369
Industry analyst inquiries - Chris Brown, chbrown@ptc.com, 781-370-5951
Investor/financial analyst inquiries - Erin Reilly, ereilly@ptc.com, 781-370-5829

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