ServiceMax specializes in cloud-native, product-centric field service management (FSM) software.
The acquisition is expected to strengthen PTC's closed-loop product lifecycle management (PLM) offerings by extending the digital thread of product information into downstream enterprise asset management (EAM) and FSM capabilities.
Subject to the satisfaction of regulatory approval and other applicable closing conditions, the transaction is expected to close in early January 2023.
Partners since 2015, PTC and ServiceMax both support manufacturers of complex, highly configured products for the medical device, industrial products, aerospace and related verticals.
"The PLM capabilities PTC has long offered to engineering and manufacturing departments provide the system of record for the digital definition of any product configuration," PTC Presidend and CEO Jim Heppelmann said. "ServiceMax will complement this by providing the system of record for monitoring and servicing product instances after they leave the factory and move into customer use.
"Upon completion of this acquisition, PTC will have the unique ability to complement the full digital product definition from our computer-aided design (CAD) and PLM solutions with detailed usage information from our internet of things (IoT) solutions and the complete service history from ServiceMax."
ServiceMax provides a comprehensive suite of cloud-native FSM capabilities built on the Salesforce platform. These capabilities include managing all relevant information about serviced products – product description, serial number, service history and more – creating and managing work orders and scheduling and dispatching technicians.
ServiceMax's FSM capabilities are also closely integrated with Salesforce's customer relationship management (CRM) system, which bridges a deep understanding of the product with an equally deep understanding of the customer.
ServiceMax's FSM capabilities will complement PTC's entire digital thread portfolio: leveraging product definition data from PTC's Creo and Windchill solutions, technical publishing capabilities from PTC's Arbortext software, service parts management capabilities from PTC's Servigistics software, IoT and digital twin capabilities from PTC's ThingWorx solutions and augmented reality (AR) capabilities from PTC's Vuforia software.
For example, by remotely monitoring connected products with ThingWorx, customers could proactively detect service needs and automatically generate service orders in ServiceMax.
Service technicians could leverage 2D work instructions from Arbortext or 3D AR work instructions created in Vuforia that are derived from the product's digital product definition information created in Creo and managed in Windchill.
Technicians could also leverage a more detailed understanding of service activities to better optimize spare parts inventory with Servigistics.
Transaction Details and Financial Impact
The purchase price will be funded in two stages, with $808 million paid at closing and $650 million paid in October 2023. The transaction will be funded with cash on hand, borrowings under PTC's existing credit facility and a new $500 million committed term loan.
ServiceMax is expected to contribute approximately $160 million in ARR for PTC's Q2'23.
The transaction is expected to be accretive to PTC's FY'23 cash flow from operations, free cash flow and adjusted free cash flow targets.