Schneider Electric said it has entered into a definitive agreement to acquire PTC (NASDAQ:PTC) for $205 per share in cash, a transaction that implies an enterprise value of about €21 billion and is intended to expand Schneider’s industrial software, artificial intelligence and digital capabilities.
Chief Executive Officer Olivier Blum said the acquisition would add product design and lifecycle-management software to Schneider’s existing technology portfolio, which includes AVEVA, ETAP and the pending acquisition of Cognite. He described the deal as the “last brick” in Schneider’s portfolio strategy to connect physical operations with digital systems across the asset lifecycle.
Building a Digital Thread
PTC brings capabilities in computer-aided design, product lifecycle management, application lifecycle management and service lifecycle management, including its Creo and Windchill offerings. Schneider said these tools would complement its existing strengths in energy management, industrial automation, process control, engineering, industrial data and AI.
Schneider’s vision is to provide an open and interoperable digital system spanning design, control, data and intelligence. The company said it does not intend to create a closed ecosystem and wants customers to retain the ability to use third-party hardware and software alongside Schneider offerings.
“We create a unique digital system which is based on design, control, data, and intelligence,” Blum said. He added that combining PTC’s product-design data with Schneider’s energy and industrial capabilities could help customers make decisions at the enterprise level and apply intelligence back to physical operations.
The company cited potential applications in energy storage manufacturing, machine building and data centers. For example, Schneider said PTC’s mechanical-design capabilities could be combined with ETAP’s electrical-design tools, while PTC software could complement Schneider’s automation offerings for machine builders.
Synergy and Market Expansion Targets
Chief Financial Officer Nathan Fast said Schneider expects to generate €250 million in cost synergies within three years, alongside approximately €250 million in one-time implementation costs. The anticipated cost savings include the elimination of U.S. public-company costs, procurement savings and selected infrastructure and IT efficiencies.
Schneider also identified €800 million in potential revenue synergies through cross-selling software into complementary customer bases, expanding access through Schneider’s partner network and developing AI-enabled digital-thread offerings.
Fast said the companies’ customer and industry exposure is complementary, with Schneider gaining deeper access to discrete and hybrid industrial customers and PTC gaining broader access to Schneider’s process and hybrid customer base. Blum also said PTC broadens Schneider’s exposure to sectors including automotive and aerospace.
Schneider said the deal would triple its accessible industrial software market. On a 2025 reference basis, the combined software-assisted business would represent 24% of group revenue, up five percentage points from Schneider on a standalone basis. The portfolio would have 89% recurring revenue, according to the company.
Financial Profile and Financing
Fast said PTC is expected to contribute approximately 10% organic annual recurring revenue and revenue growth in the medium term, with an approximately 85% gross margin, a 40% adjusted EBITA margin before synergies and cash conversion above 100%.
The transaction is valued at approximately 13 times adjusted EBITA including full run-rate synergies, Schneider said. The company expects the acquisition to be immediately accretive to adjusted earnings per share before purchase price accounting in the first year: low single-digit accretion with base synergies and mid- to high-single-digit accretion with full run-rate synergies.
Schneider expects transaction return on capital employed to exceed its weighted average cost of capital by year five, including full run-rate synergies.
The €22 billion total cash consideration is backed by a fully underwritten bridge facility. Schneider plans to fund the deal with €5 billion to €6 billion of equity raised through an ABO and €16 billion to €17 billion of senior debt across multiple currencies.
The company said its capital-allocation priorities remain unchanged, including its commitment to a Category A credit rating, progressive dividend policy, active portfolio management and the overall size of its 2030 share-buyback program. However, share repurchases are expected to pause during 2027 and 2028.
Closing Timeline and Integration
The transaction is expected to close by the third quarter of 2027, subject to regulatory approvals and a simple-majority vote by PTC shareholders. Schneider said it expects to seek customary approvals, including a review by the Committee on Foreign Investment in the United States, or CFIUS, but does not anticipate major issues.
Until closing, the companies will continue to operate separately. Blum said Schneider intends to build a unified industrial software organization encompassing AVEVA, Cognite and PTC, while preserving specialized capabilities where needed. Retaining key personnel will be a priority, he said.
Schneider said it has not yet finalized the timing for raising equity and refinancing debt, though Fast said the company intends to reduce financing risk rapidly.
About PTC (NASDAQ:PTC)
PTC Inc (NASDAQ: PTC) develops software designed to help manufacturers and other industrial companies create, manage, operate and service physical products. Its portfolio supports product lifecycle management, computer-aided design, application lifecycle management, service lifecycle management, industrial Internet of Things applications and augmented reality.
PTC’s primary products include Creo for 3D computer-aided design and engineering, Windchill for product lifecycle management, Codebeamer for application lifecycle management, and Servigistics for service parts and service operations management.
