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Schneider Electric to Acquire PTC in Move to Strengthen Energy and Industrial Intelligence
Schneider Electric plans to acquire PTC for $22.6 bn to expand its industrial software portfolio and strengthen its AI and engineering capabilities.
Schneider Electric, a global energy technology firm, and PTC Inc. (“PTC”) (NASDAQ: PTC), a firm in complex industrial product design, engineering and data management, today announced that they have signed a definitive agreement under which Schneider Electric will acquire PTC (“the transaction”).
Olivier Blum, Chief Executive Officer of Schneider Electric, said:
“The acquisition of PTC represents an important step forward in our ambition to lead the new era of Energy and Industrial Intelligence. Together, we are creating the industry’s most complete Software & AI powerhouse and highest-quality portfolio bridging the physical and digital worlds. By connecting and contextualizing data across the lifecycle of products and assets, we will create a unique digital thread for the next generation of Industrial AI, helping customers to optimize their systems with greater intelligence from design and build to operate and maintain. Neil Barua and the PTC teams have established an outstanding track record of growth, innovation and customer success. At Schneider Electric, we have built a strong leadership position in industrial software with AVEVA under the leadership of Caspar Herzberg. Together, with Cognite’s1 unique AI capabilities, we will accelerate innovation, unlock new opportunities and create long-term value for our customers, employees and shareholders as we shape the future of Energy and Industrial Intelligence.”
Neil Barua, President and CEO of PTC, said:
“PTC provides the software the world’s leading manufacturers and product companies rely on to design, build, and maintain great products and unlock more value from their product data in an increasingly AI driven world. Joining Schneider Electric is an incredible opportunity to elevate the scope and impact of what we deliver for our customers globally. 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. This all-cash transaction is the culmination of the PTC Board’s commitment to maximize shareholder value. It delivers certain and compelling value to our shareholders and reflects the strength of PTC’s business, our strategy, and our outstanding team. I am deeply grateful to our talented and dedicated employees around the world for everything they have done to make PTC what it is today. We look forward to building on this strong foundation and beginning an exciting new chapter with Schneider Electric.”
How AI and Digitalisation Are Transforming the Energy and Industrial Sectors
The world is entering an era of Energy and Industrial Intelligence, driven by the convergence of the New Energy Landscape and the acceleration of Digitalization & AI, reshaping customer needs. As industrial AI moves beyond digital applications and is increasingly embedded in physical products and machines, processes and energy systems, new applications are emerging across the lifecycle.
By connecting physical and digital systems, from design and construction to operation and maintenance, contextualised industrial data can be used to generate insights and support AI-driven decision-making. This approach can support improvements across design, control, data management and industrial intelligence systems.
PTC: An Industrial Software Platform Specialising in Product Design and Engineering
PTC specialises in complex industrial product design, engineering and data management, serving more than 30,000 customers worldwide.
Its computer-aided design (CAD), product lifecycle management (PLM), application lifecycle management (ALM) and service lifecycle management (SLM) capabilities help customers design complex physical products and manage their product and engineering data throughout the entire lifecycle, from initial definition and design through to service and optimization. It generated €2.4 billion revenue and ~40% Adj.
EBITA margin in CY25, with revenue and ARR expected to grow by ~10% annually through 2029.
PTC operates an industrial software and intelligence platform focused on discrete and hybrid manufacturing, with activities spanning product design, engineering and lifecycle management.
PTC to Expand Schneider Electric’s Industrial Software Portfolio
PTC would complement Schneider Electric’s industrial AI data foundation, alongside its proposed acquisition of Cognite, by adding product and engineering data to its existing process and energy data capabilities.
By connecting engineering data with real-world operational information, the combination is expected to expand Schneider Electric’s Energy & Industrial Intelligence capabilities and provide context for AI agents to support productivity, resilience, efficiency and sustainability.
The transaction extends Schneider Electric’s proven asset lifecycle platform upstream into product design and engineering, creating an end-to-end industrial software and intelligence platform intended to support continuous improvement.
Schneider Electric expects its global presence, market access and experience in the energy and industrial sectors to broaden PTC’s customer base, expand its market exposure and create cross-selling opportunities for both companies.
Strategic Rationale Behind the Acquisition
- The transaction with PTC is expected to expand Schneider Electric’s industrial software portfolio, bringing Software & Services revenues to an estimated 24% of Group revenues on a pro forma basis, with more than 15,000 software employees and over 50,000 software customers. Beyond scale, the transaction would address a gap in product lifecycle management and industrial software while maintaining an open and interoperable approach across vendors and hardware.
- The combination would allow Schneider Electric to incorporate upstream resources into its model, connecting physical and digital systems from design and construction to operation and maintenance. The company expects this integration to support faster product design, improved construction and manufacturing processes, more efficient operations and ongoing product and system development.
- PTC would bring product and machine design capabilities through its computer-aided design (CAD) solutions, while adding product lifecycle management (PLM), application lifecycle management (ALM) and service lifecycle management (SLM) capabilities. By combining PTC’s product design and engineering data with Schneider Electric’s operational and energy data, the transaction aims to establish a contextualised data foundation supporting AI applications across products, machines, processes and energy systems.
- The combination is expected to expand Schneider Electric’s total addressable market in industrial software by approximately three times, including in discrete and hybrid manufacturing, while maintaining exposure across different industries and sectors. Schneider Electric expects its global presence, distribution channels and experience in the energy sector to provide PTC with access to additional markets and create cross-selling opportunities for both companies.
- Augmenting key financial metrics: The acquisition is expected to contribute to Schneider Electric’s revenue growth, recurring software revenues, profit margins and cash generation, in line with its Digital Flywheel strategy and financial objectives.
Transaction terms, financing and next steps
Transaction terms
Subject to completion of the closing conditions, PTC shareholders will receive $205 per share in cash, representing a 42.3% premium to PTC’s last closing price and a 46.1% premium to the previous 30-trading days volume-weighted average share price prior to announcement. The transaction values 100% of PTC equity at approximately $22.6 billion, which implies a $23.7 billion enterprise value.
Expected Financial Impact of the Acquisition
Schneider Electric estimates the transaction would be accretive to Schneider Electric’s financial profile across key metrics, including revenue growth, recurring revenue mix, gross margin, Adjusted EBITA margin and free cash flow conversion.
Schneider Electric is focused on delivering disciplined shareholder value creation and expects to achieve €250 million of executable cost synergies by Year 3 and approximately €800 million of revenue synergies. These synergies are expected to result from cross-selling opportunities across the companies’ customer bases, expanded distribution channels and market access, broader geographic reach and the joint development of AI-enabled digital thread solutions.
Schneider Electric expects the transaction to be immediately low single-digit accretive to Adj. EPS (before PPA5) in the first year of full consolidation and mid-to high-single-digit accretive to Adj. EPS (before PPA) including full run-rate synergies. Transaction ROCE is expected to exceed WACC by Year 5 post-closing including full run-rate synergies.
Financing
The total cash consideration of approximately €22 billion is secured through a fully committed bridge facility provided by Morgan Stanley and Société Générale.
Total consideration is expected to be funded via a combination of an equity issuance of approximately €5 to 6 billion and new debt issuance of approximately €16 to 17 billion. The equity issuance is expected to take the form of an Accelerated Bookbuild Offering (ABO) using the existing financial authorization given by the AGM to the Board, while the new debt issuance is expected to be conducted across several currencies.
Confirmation of commitments taken on capital allocation at its 2025 Capital Markets Day:
- Credit ratings: Schneider Electric expects to retain Category A credit ratings. This remains subject to formal confirmation by the ratings agencies.
- Progressive dividends: Schneider Electric expects to continue its policy which has resulted in a progressive dividend for the last 16 years.
- Active portfolio management: Schneider Electric intends to continue its €1.0-€1.5 billion revenue disposal program, to be completed by 2030, while pursuing acquisitions aligned with its strategy and developing partnerships and alliances.
- Share buyback: Schneider Electric remains committed to its share buyback program of €2.5-€3.5 billion through 2030. The Group expects to complete €600 million of share buyback in 2026 in accordance with its systematic program previously announced, with the expectation for a pause in 2027 and 2028 with acceleration thereafter, before completion of the program by the end of 2030 within the envelope previously announced.
Closing and next steps
The transaction has been unanimously approved by the Boards of Directors of both companies. Closing of the transaction is anticipated by Q3 2027, subject to customary closing conditions, including approval by PTC’s shareholders holding at least a majority of outstanding PTC shares at a special shareholder meeting and receipt of required regulatory approvals.
The PTC Board of Directors resolved to recommend that the Company’s shareholders approve the Merger Agreement.
