Internet of Things: $110MM ColdLight buy is PTC's 2d Phila. deal (Updates)
PTC buys Neuron maker and its $2MM in quarterly sales
PTC, a Needham, Mass. company that's assembling a portfolio of Internet of Things sensor-communications software and systems, says it has agreed to buy Wayne-based ColdLight Solutions LLC and its Neuron automatic analytics platform for $105 million. The deal follows PTC's 2014 acquisition of Exton-based ThingWorx, whose systems process user data from "smart connected products," for $112 million (plus a possible $18 million bonus).
ColdLight, founded by ex-Electronic Ink COO Ryan Caplan and serial tech founder Eric Smith, reports just $2 million in quarterly software subscription sales; the price, many times yearly sales, let alone profits, is a sign of high investor interest in "IoT". (ThingWorx wasn't profitable when PTC took it out last year.) ColdLight is backed by Intel Capital and Kayne Anderson Capital Advisors LP. ColdLight raised $10 million from investors in 2013.
NEW: A person familiar with the company told me ColdLight was valued after that deal at around $30 million, and projected $10 million in annual software-as-a-service sales, implying an expected 50%+ annual growth to get to today's price. ColdLight registered 23 current and former employees in its retirement plan last year. The companies didn't immediately respond to calls seeking comment on whether they plan to combine operations and whether Philadelphia-area workers will more likely be hired, or cut, in the near future.
EARLIER: "ColdLight will serve as PTC's core data analytics platform to deliver new value to markets both companies serve today – manufacturing, healthcare, media and retail – as well drive growth across new markets," PTC said in this statement. "Combined with PTC's ThingWorx IoT platform, ColdLight's Neuron will automate the analysis of data from things to address a range of important challenges:" finding failures and correlations, prescribing and prioritizing fixes, "by using artificial intelligence and machine learning technology" and reducing maintenance costs.
"Sensor data by itself creates value, but that value is magnified dramatically when companies use predictive analytics to process that data into many forms of actionable knowledge," said PTC CEO Jim Heppelmann in the company's statement.
"All industries, but especially manufacturing, can benefit from a data analytics strategy in the Internet of Things era," added ColdLight boss Caplan.
"The Internet of Things is clearly one of the hottest segments of the broader technology industry, and the recent acquisition strategy by PTC points to the strong business opportunity companies of all stripes are seeing in this area," Mike Harris, ceo of Zonoff, a Malvern-based, IoT-focused home automation platform company, told me. Besides industrial IoT specialists like PTC, tech giants Apple, Amazon and Google have lately expanded into IoT consumer stragecies seeking, like Zonoff, to boost sales by offering "better data and greater visibility into the inner workings and usage of connected devices."
Software-as-a-Service companies like ColdLight "continue to command solid valuations," under veteran tech bosses like Caplan, in new-company-friendly locations like suburban Philadelphia, Michael DiPiano, managing eneral partner at NewSpring Capital in Radnor, told me. It's "another wonderful exit."