- The new business unit DxP Services entity will combine PLM professional services experts from both firms into one team
NEW DELHI : ITC Infotech India Ltd has agreed to buy a segment of US software and services company PTC’s product lifecycle management (PLM) business and set up its own PLM unit, called DxP Services.
As part of their expansion plan, the two companies also agreed to boost customer digital transformation initiatives, focused on adopting PTC’s Windchill PLM software as a service (SaaS), ITC Infotech said on Friday.
The value of the acquisition was not disclosed. A person aware of the development said ITC Infotech is paying around $130-150 million for the business. The payment is being made in two tranches—the first will be paid out in this fiscal and the remainder in the following year.
The deal has been in the works since October last, the person said on the condition of anonymity.
ITC Infotech, whose revenue is roughly around ₹3,000 crore, can add $100-120 million with the PTC buy, this person said. “The idea is to reach around $500 million in revenue and opt for a listing thereafter,” the person said.
Parent ITC Ltd has been considering the listing of its infotech arm, Mint reported earlier. With cash on the books of ITC, acquisitions are a convenient way to expand the infotech unit’s business.
The newly created entity will combine PLM professional services experts from both firms into one team dedicated to creating and offering the tools and methodologies required to expedite a smooth transition to SaaS, the statement added.
“Together with ITC Infotech, we are creating a specialized team to unlock the potential of our Windchill services business and accelerate manufacturers’ ability to realize the benefits of SaaS, such as accessibility, security, and a lower total cost of ownership,” said Jim Heppelmann, president and chief executive of PTC. “It has long been PTC’s strategy to build a partner ecosystem that brings to bear the expertise and capacity of systems integrators to drive business transformation and technology adoption across the global customer base.”
He added that this new deal with ITC Infotech would allow PTC to realign its professional services experts to a unique thought leadership role in the industry.
The transaction is expected to be completed in PTC’s fiscal third quarter. PTC’s fiscal year ends on 30 September.
Management plans to discuss the expected impact of the agreement on PTC’s financial and operating metrics during its fiscal Q2 quarterly earnings call on 27 April, the statement said.
ITC Infotech provides technology solutions and services to enterprises across healthcare, manufacturing, consumer goods, banking and financial services and travel and hospitality industries.
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