PTC shares soar nearly 34% after Schneider Electric agrees to $22.6 billion buyout

PTC shares surged nearly 34% on Monday after French energy and software group Schneider Electric agreed to acquire the US industrial software company for $22.6 billion in cash, Reuters reported.

The deal comes as software companies seek to secure revenue streams amid concerns that advances in artificial intelligence could offer competing services at lower costs.

According to the Reuters report, Schneider manufactures equipment for energy systems, including data-centre cooling technology, and provides product-management software. PTC specialises in computer-aided design and software used in industrial processes.

The acquisition “creates a leading, scaled, open and interoperable industrial software and AI franchise,” Schneider said, adding that PTC’s board had approved an offer representing a 42% premium to the company’s most recent share price.

“We gain substantial scale and resources to accelerate innovation, advance our Intelligent Product Lifecycle vision, and expand our business into more geographies and end markets to serve more customers,” PTC Chief Executive Neil Barua said in the statement.

Boston-based PTC employs about 7,000 people, serves around 30,000 customers and generates nearly half its revenue from the Americas. Schneider plans to take on as much as €17 billion ($19 billion) in debt and issue up to €6 billion in new shares to finance the transaction. The funding plan weighed on Schneider’s stock, which fell more than 8% in early Paris trading.

Jefferies analysts in a research note said, "AI disruption fears are still weighing on software valuations, which allows acquiring PTC at a decade-low valuation."
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