Milwaukee-based Rockwell Automation Inc. will invest $1 billion in Massachusetts-based PTC Inc. as part of a strategic partnership to combine PTC’s Internet of Things and augmented reality offerings with Rockwell’s analytics and industrial automation platforms.
“The result will be an unmatched integrated information solution that will enable customers to achieve increased productivity, heightened plant efficiency, reduced operational risk and better system interoperability,” a joint press release from the two companies said.
The deal will give Rockwell an 8.4 percent ownership stake in PTC after it acquires nearly 10.6 million newly issued shares at $94.50 per share and PTC completes a share repurchase. The deal is expected to close within 60 days.
Blake Moret, chairman and chief executive officer of Rockwell, will also join the PTC board of directors.
The deal also includes a standstill provision that prevents Rockwell from acquiring more than 9 percent of PTC’s stock, proposing any merger with PTC or pushing for certain shareholder votes.
In addition to the equity investment, Rockwell and PTC agreed to a strategic alliance that calls for both companies to have the right to distribute some of the other party’s products on an OEM basis and resell those same products on a standalone basis.
Rockwell is also committing to sell an undisclosed minimum amount of PTC’s products during the term of the strategic alliance, which initially runs through Sept. 30, 2021.
Moret, speaking onstage today with PTC CEO Jim Heppelmann at Rockwell’s TechEd event in San Diego, said customers have asked the two companies to work together in the past.
“It’s a natural alignment for our companies to get together in this way,” Moret said.
PTC reported $1.16 billion in revenue in fiscal 2017 and sales were up 8.5 percent in the first half of fiscal 2018. The company has more than 6,000 employees worldwide, including nearly 2,200 in the U.S.
At the San Diego event, Heppelmann jokingly asked Moret if his presence on the PTC board means he should start calling him “boss.”
“Not yet,” Moret responded.
