PTC announced it plans to purchase fellow Massachusetts-based Internet of Things player Axeda for approximately $170 million.
The deal came at the same time PTC posted its Q3 earnings results, with revenue up 7 percent to $337 million.
PTC says by buying Axeda it will be better positioned to build out its IoT stack. Axeda's core product is its Machine Cloud Service, which addresses M2M and IoT connectivity services by allowing companies to securely connect their products to the cloud using cellular, Internet, Wi-Fi, or satellite communication channels.
PTC also highlighted Axeda’s Connected Machine Management application set, which enables companies to remotely monitor and service products and deliver over-the-air software updates.
Like so many other enterprise IT vendors, PTC has taken the acquisition approach to expanding its footprint in the IoT space. Last December, PTC bought Pennsylvania-based ThingWorx for $130 million. Through that deal, PTC gained a technology that's used to speed the creation of IoT applications and provide predictive maintenance and system monitoring.
PTC president and CEO Jim Heppelmann said the acquisition of Axeda will complement ThingWorx and "accelerate PTC's ability to deliver best-in-class solutions across the entire Internet of Things technology stack."
As for its Q3 earnings results, PTC delivered a solid quarter, increasing license revenue by 15 percent year-over-year, bolstered by growth in its core CAD and PLM businesses. Along with a slight increase in revenue, the company ended the quarter with EPS of $0.53, up 19 percent year-over-year.
But it seems as though PTC is relying heavily on its acquisition-fueled IoT line of business, with Heppelmann admitting concerns regarding the health of the global manufacturing industry, a key service area for PTC. He said in a statement:
"We continue to see a somewhat uncertain pace of recovery in the global manufacturing industry, with specific concerns in China. Nevertheless, our pipeline of opportunities continues to grow, which when combined with our expanding solutions portfolio, and opportunity to address key customer challenges in the IoT space, presents a compelling growth opportunity for PTC."