Internet of Things gets boost with PTC acquisition of ThingWorx

Posted by | December 30, 2013

In February 2011—long before the term “Internet of Things” became a hot business buzzword—Safeguard Scientifics saw potential in ThingWorx, the first application platform that lets designers build and run Internet of Things (IoT) and Machine-to-Machine (M2M) applications. Since 2011, Safeguard has deployed $10 million in ThingWorx, which was founded in 2009 and based in Exton, Pa.

Safeguard’s ability to spot this emerging market was rewarded today when PTC Inc. announced that it acquired ThingWorx for $112 million, plus an earn-out of up to $18 million. Safeguard expects to receive aggregate proceeds of $40.5 million, representing a 4x cash-on-cash return. Approximately $4.1 million of such proceeds will be held in escrow pending the expiration of an escrow period expiring December 30, 2015. Safeguard has the opportunity to receive up to an additional $6.5 million based on certain milestones achieved over future periods. This would increase Safeguard’s total return to approximately $47.0 million, representing a 4.7x cash on cash return.

With Safeguard’s support, ThingWorx became a recognized leader in this sector in less than three years. Recognized by Gartner, Harbor Research and Connected World, ThingWorx has attracted clients in a diverse number of industries, from agriculture to utilities to transportation.

Award-winning ThingWorx complements the services of Needham, Mass.-based PTC, which provides technology solutions that help companies design, construct and service products across their lifecycles. In addition, this acquisition helps to accelerate PTC’s ability to support companies seeking product and service advantage in a smart, connected world.

Safeguard will continue to concentrate on IoT, which has the potential to create an economic impact between $2.7 million to $6.2 million annually by 2025, according to the report “Disruptive technologies: Advances that will transform life, business, and the global economy,” released in May 2013 by the McKinsey Global Institute.

Not only does IoT allow companies to efficiently create smart and connected products, but it’s also populated by the kind of game-changing innovators that have defined—and continue to define—successful Safeguard partner companies.

Click here for Safeguard’s complete press release.

And take a look at the following video for PTC’s perspective on its acquisition of ThingWorx.


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