With what seems like forever, we have witnessed the ongoing and perpetual consolidation of the CAD industry as companies continue to get swallowed up by others. Some of the acquisitions have been successful and some, well, not so much. We’ve witnessed CAD companies acquiring CAD companies, simulation companies acquiring CAD companies, and other types of technical software and service companies acquiring CAD companies. With all the attention seemingly focused on the CAD side, it’s sometimes easy to forget that there also has been a significant consolidation through acquisition on the CAM side, as well the past several years. Let’s take a quick look at a few of these acquisitions as the CAM circle continues to get smaller.
Edgecam 2014 R1 Workflow
In 2008, Cimatron acquired GibbsCAM from Gibbs and Associates for its production machining capabilities. Skip ahead a few years when 3D Systems Corp. announced Nov. 24, 2014 that it had signed a definitive agreement to acquire all of the outstanding shares of CAD/CAM software developer Cimatron Ltd. The agreement calls for 3D Systems to acquire Cimatron in an all-cash purchase valued at approximately $97 million. Cimatron was acquired to strengthen 3D Systems’ portfolio in 3D design and manufacturing, add complementary products and technology, extend 3D Systems’ direct and reseller sales organizations, and broaden the development team.
Like all deals of this type, the transaction is subject to closing conditions, including requisite regulatory approvals and approval of Cimatron’s shareholders. However, the Boards of Directors of both companies have approved the proposed transaction, and the deal is expected to close in Q1 2015.
Late in 2013, Autodesk announced it was acquiring CAM-centric software giant Delcam plc for just under $300 million. Since the acquisition was completed early in 2014, Delcam operates as a wholly owned, independently operated subsidiary of Autodesk, with seemingly no significant changes for Delcam’s business, based on conversations we’ve had with personnel from both respective companies.
In July 2014, metrology powerhouse Hexagon AB bought UK-based CAD/CAM developer Vero Software. I considered this a huge (and smart) move for both companies.
Hexagon markets its products and services under more than 35 different brands worldwide. Its operations encompass hand tools, fixed and portable coordinate measuring machines, GPS systems, construction machine control systems, level meters, laser meters, total stations, sensors for airborne measurement, aftermarket services and software systems.
Vero Software is a major developer of CAD/CAM software. It develops and distributes software for aiding design and manufacturing processes, providing solutions for the tooling, production engineering, sheet metal, metal fabrication, stone and woodworking industries. Several well-known brands in Vero Software’s portfolio brands include Alphacam, Cabinet Vision, Edgecam, Machining STRATEGIST, PEPS, Radan, SMIRT, SURFCAM, VISI, and WorkNC, along with the production control MRP system Javelin.
Despite the diversity of Vero’s applications, they all address the rising challenges of achieving manufacturing efficiencies.
The acquisition strengthened Hexagon’s software offerings, providing the means to close the gap of making quality data fully available by extending the reach of the newly developed MMS (metrology planning software) to include CAM (manufacturing planning software).
This constant flow of acquisitions certainly make for interesting times. As much as anything, I think these acquisitions illustrate the desire for technical organizations to diversify when it makes sense for symbiotic relationships. Instead of trying to corner a market by acquiring all competitors, more and more technical software acquisitions seem to be happening with technologies that complement existing product offerings, not just expand similar lines of offerings.
The common thread that runs through all of these acquisitions is maximizing manufacturing capabilities and efficiencies, so the companies involved should do well with their complementary roles.
So, is the continuing consolidation of the CAM market necessarily a bad thing? I guess I’d have to answer that question with a “yes” and “no.” On the one hand consolidation means fewer choices and some current customers feel they are being held hostage to the whims of the acquiring company. However, on the other hand, it’s more likely that an acquiring company will continue to develop the software and support its current customers, while trying to appeal to a bigger segment of prospective customers.
Keep in mind, too, that there are a number of decent free, open source CAM software offerings. Of course, not all of these are “production ready,” but in the end add to the fact that there are plenty of CAM options still available despite market consolidation.