Oct 5 (Reuters) - France's Schneider Electric struck its biggest deal ever on Monday, agreeing to buy PTC in an all-cash deal valuing the US software company's equity at around $22.6 billion, it said in a statement.
The $205-per-share offer implies an enterprise value of $23.7 billion for Boston-based PTC and represents a 42.3% premium to its last closing price.
The French engineering company's shares were down 4.7% on Tradegate before the market opened, as investors digested the size of the acquisition alongside concerns that Schneider would be paying a substantial premium for a software business facing AI-driven valuation pressure and uncertain growth prospects.
"Large-scale M&A is typically unwelcome in the first instance by European investors, although Schneider Electric's deals have typically proven strategically astute, if debatable from a valuation standpoint," J.P. Morgan analysts said in a note to investors.
The transaction is the largest-ever acquisition in the history of Schneider, France's third-highest-valued listed company by market capitalisation, according to LSEG data.
Schneider said the acquisition would create a scaled industrial software and AI business built around open and interoperable systems, which it expects to generate €250 million in annual run-rate cost savings by the third year after closing, alongside about €800 million in expected revenue synergies.
The deal continues Schneider's push into software acquisitions, having agreed to buy Cognite Holding, a privately held provider of AI software and industrial data, in June.
It will be financed through a combination of equity and new debt and is expected to be closed in the third quarter of 2027.
Schneider, once known primarily for industrial components like fuses and circuit breakers, now builds the backbone of data centres, supplying everything from cooling units and server racks to critical power distribution equipment.
The booming demand for data centres, particularly from the United States, is driving Schneider's earnings, offering a growing source of revenue helping offset weakness in some traditional electrical-equipment markets.
PTC, which provides software solutions for designing, manufacturing and servicing products across multiple sectors, has also benefited from growing demand for its AI-powered tools.
($1 = 0.8936 euros)
Reporting by Sabrina Valle in New York, Harishankar Manoj in Bengaluru and Lucie Barbier and Dimitri Rhodes in Gdansk; Editing by Cynthia Osterman, Nick Zieminski and Milla Nissi-Prussak
Source: Reuters