UGS To Buy PLM Supplier Tecnomatix

Manufacturing Engineering, Feb 2005

Digital manufacturing/PLM software developer UGS (Piano, TX) announced that it has reached an agreement to buy all of the outstanding shares of software developer Tecnomatix Technologies Ltd. (Herzilya, Israel) for approximately $228 million in cash, or $17.00 a share.

UGS said it has signed a definitive agreement to acquire all of the outstanding equity of Tecnomatix, a supplier of Manufacturing Process Management (MPM) software solutions for the automotive, electronics, aerospace and other manufacturing and processing industries. The transaction furthers UGS bid to expand its suite of software solutions to provide value across a product's entire lifecycle.

The digital manufacturing software suppliers have worked together in a technology partnership since 2002. PLM consulting and research firm CIMdata (Ann Arbor, MI) estimates that investments in digital manufacturing initiatives by industrial companies are expected to grow by more than 25% annually over the next three years. UGS has reported a nearly 100% increase in digital-manufacturing-related revenue over the last four quarters, according to the company.

UGS currently deploys Tecnomatix software in conjunction with its Open Manufacturing Backbone (OMB), a globally scalable technology backbone designed to transform the process of digital manufacturing through an open environment in which third-party software applications can interoperate. UGS said it expects to speed up the integration with Tecnomatix solutions and deliver these solutions as an integral component of both its OMB and its E-factory digital manufacturing solution more quickly and seamlessly.

Subject to regulatory approvals, the transaction is expected to close by the end of the first quarter 2005. Following the close of the transaction, the companies intend to offer a fully integrated solution of Tecnomatix MPM to UGS Teamcenter users, while continuing to offer Tecnomatix' open standalone MPM solution integrated with the PLM environment of choice for its customers.