Earnings

Schneider Electric Agrees To Pay $205 A Share In Cash For PTC, With A $700 Million Breakup Fee

The all-cash deal values PTC's equity at about $22.6 billion, and closing is anticipated by the third quarter of 2027.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

— 2 min read
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Schneider Electric Agrees To Pay $205 A Share In Cash For PTC, With A $700 Million Breakup Fee

Schneider Electric agreed to buy PTC for $205 per share in cash, a deal that values PTC's equity at about $22.6 billion and its enterprise value at $23.7 billion, according to the joint press release and an 8-K PTC filed Monday. PTC makes product design and engineering software and is based in Boston.

What the filings say

The price is a 42.3% premium to PTC's last close and 46.1% above its 30-trading-day volume-weighted average price, the companies said. The 8-K says the merger agreement was signed on October 4, and that PTC's board approved it and resolved to recommend that shareholders approve it.

PTC would become a wholly owned subsidiary of Schneider, and its stock would be delisted from the Nasdaq Global Market. Restricted stock units that have not yet vested would be converted into deferred cash awards, with performance-based conditions deemed met at maximum.

The 8-K bars PTC from soliciting rival bids, though the board may engage with a competing proposal it judges to be, or likely to lead to, a superior offer. PTC must give Schneider a match period before changing its recommendation. If PTC terminates to accept a superior offer, or Schneider terminates after the board changes its recommendation, PTC owes Schneider a $700 million fee.

What it changes for holders

Holders get cash, not Schneider stock. PTC shares were indicated at $195.75 in Monday pre-market trading, up about 36% from Friday's $144.03 close (market data).

Schneider expects $250 million of annual cost synergies by Year 3 and about $800 million of revenue synergies. It also expects low-single-digit adjusted earnings-per-share accretion — a boost to earnings per share — in the first year of full consolidation.

Financing is not a condition of the deal. Morgan Stanley Europe and Société Générale committed to a $25 billion bridge loan, a short-term facility, though the merger does not depend on Schneider obtaining financing.

What to watch

Closing requires approval from a majority of PTC's outstanding shares, expiration of the Hart-Scott-Rodino antitrust waiting period, and approval from the Committee on Foreign Investment in the United States. The companies anticipate closing by the third quarter of 2027.

Schneider releases third-quarter revenue on October 16.

The next dated event is October 16, when Schneider reports third-quarter revenue; the shareholder vote and the antitrust and CFIUS clearances stand between the deal and a close by the third quarter of 2027.

Sources

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