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December 23, 2015

Kepware to be bought by Massachusetts firm for $100M

FILE PHOTO: Tim Greenway Tony Paine, CEO of Kepware, said as early as 2011 that the technology firm is investing in sales and marketing, including reaching out to international markets.

PTC (NASDAQ: PTC), an Internet of Things technology company based in Needham, Mass., announced today it has signed a definitive agreement to acquire Kepware, a Portland-based software development company that provides communications connectivity to industrial automation environments, for approximately $100 million.

The company stated the purchase agreement includes up to an additional $18 million based on achievement of certain strategic initiatives and financial results.

“We believe this acquisition will provide Kepware with substantially greater market access and financial resources, allowing us to grow faster, capture a larger global market share, and become a clear leader in the fast-moving ‘Internet of Things’ era,” Kepware CEO Tony Paine and PTC President and CEO James Heppelmann said in a joint statement posted on PTC’s website.

In their statement, Paine and Heppelmann said the “combination of PTC and Kepware will result in a larger, financially stronger company – benefiting the combined customer base.” The transaction is expected to close in early 2016, subject to customary closing conditions, including regulatory approval.

Founded in 1985, PTC employs approximately 6,000 people serving more than 26,000 businesses worldwide. Founded in 1995, Kepware has more than 85 employees serving customers in more than 120 countries in such industries as manufacturing, oil and gas, building automation, and power and utilities.

“Kepware and PTC share a common vision of helping organizations realize the potential of the Industrial Internet of Things,” Paine said. “We believe this acquisition will benefit our customers, partners, and employees — and ultimately drive software innovation for industrial automation markets. We are excited for the opportunity to become part of PTC.”

Over the past 12 months, privately-held Kepware generated approximately $20 million in revenue, according to the release. PTC expects to draw on its credit facility to finance this transaction and expects Kepware to be neutral to its fiscal year 2016 non-GAAP earnings per share.

PTC intends to maintain the Kepware partner ecosystem and to continue developing and enhancing the Kepware technology, once acquired. For more about Kepware, read this 2014 Mainebiz profile. Kepware also opened its first overseas office in Tokyo this past summer.

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