Schneider Electric to buy US software firm PTC in $22.6 billion deal

France-based Schneider Electric has announced its largest acquisition to date, agreeing to purchase US software firm PTC in a $22.6 billion all-cash deal, according to a statement released on October 5. The $205-per-share offer translates to an enterprise value of $23.7 billion for PTC, representing a 42.3% premium over its most recent closing price.

The French engineering company's shares experienced a 4.7% decrease before trading opened, as investors weighed the magnitude of the acquisition alongside concerns about Schneider's substantial premium payment for a software business grappling with AI-driven valuation pressures and uncertain growth prospects. While large-scale M&A is typically unwelcome among European investors, J.P.

Morgan analysts noted that Schneider's deals have generally proven strategically astute, albeit debatable from a valuation perspective. The transaction marks the largest acquisition in Schneider's history, the third-highest-valued listed company in France by market capitalization. Schneider's acquisition of PTC aims to create a scaled industrial software and AI business built on open and interoperable systems, with annual run-rate cost savings of €250 million expected by the third year post-closing and about €800 million in revenue synergies.

The deal, financed through a mix of equity and new debt, is projected to close in the third quarter of 2027. Once known for industrial components like fuses and circuit breakers, Schneider now provides the infrastructure for data centers, supplying cooling units, server racks, and power distribution equipment. The growing demand for data centers, especially from the United States, is a significant driver of Schneider's earnings, offering a robust revenue stream to counteract weakness in some traditional electrical-equipment markets.

PTC specializes in software solutions for designing, manufacturing, and servicing products across various sectors, benefiting from the increasing demand for its AI-powered tools.