Schneider Electric bets $22.6 billion on software maker PTC
French industrial group Schneider Electric agreed Monday to acquire Boston-based engineering software maker PTC for about $22.6 billion in cash, the largest deal in its history. The $205-a-share offer is a 42.3% premium, and investors worried about the price sent Schneider's stock down nearly 10% in Paris.
Schneider Electric is making the biggest bet in its history. The French company agreed Monday to buy PTC, a Boston software maker, in an all-cash deal that values PTC's stock at about $22.6 billion, according to the companies' joint announcement.
Schneider will pay $205 a share. That is 42.3% more than PTC's last closing price. Counting debt, the deal values PTC at $23.7 billion, Reuters reported.
PTC makes software that engineers use to design products and track them from the drawing board to the repair shop. It serves more than 30,000 customers and has more than 7,000 workers, the companies said.
Schneider was once best known for fuses and circuit breakers. Now it builds much of the gear inside data centers, from cooling units to power equipment, Reuters noted. Data centers and chipmakers make up almost a quarter of its sales, Capital Brief reported.
The plan is to tie design data to factory and energy data so AI tools can use it. "Data is becoming a very critical layer" for getting value from AI, Schneider CEO Olivier Blum told investors, according to Reuters.
Investors in the two companies reacted in opposite ways. Schneider shares fell nearly 10% in early Paris trading, erasing close to €15 billion, or about $17 billion, in market value, Reuters reported. PTC shares jumped 34.4% before the U.S. market opened.
Analysts split. Jefferies said fears that AI will upend software let Schneider buy PTC at a "decade low valuation," but warned that the same fears could weigh on Schneider. A Berenberg analyst called the valuation healthy.
Schneider will pay with about €5 billion to €6 billion in new shares and €16 billion to €17 billion in new debt. It expects about €250 million a year in cost savings by the third year, plus about €800 million in extra sales.
Some background: This is Schneider's second software deal this year. In June, it agreed to buy Cognite, an AI and industrial data company.
The deal needs approval from PTC shareholders and regulators. It is expected to close by the third quarter of 2027. Schneider moved up its third-quarter sales report to Oct. 16.
What we know: Schneider is paying $205 a share, mostly with borrowed money.
What we don't: Whether regulators will raise concerns, and whether Schneider's stock recovers.
Where outlets agree Reuters and Capital Brief both report that Schneider will pay $205 a share, a 42.3% premium, and that its shares fell almost 10% on the news.
Where they differ Jefferies warned that AI fears hanging over software could weigh on Schneider after the deal, while a Berenberg analyst said the price was healthy given how far software valuations have fallen.