Tag Archives: Autodesk

All in on Altium?

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Autodesk’s bid — declined, so far — for Altium took me by surprise. In retrospect, it probably shouldn’t have.

As I’ve noted many times, I fully expect Altium to be acquired. It’s just I was looking more in the direction of Dassault and PTC, the big mechanical CAD (MCAD) players. I should kept Autodesk in my field of view, especially after it acquired Eagle five years ago. I think I was lulled to sleep, as that was a small acquisition and Autodesk hasn’t made much of a push since to burrow into the ECAD space.

The proposal was hefty, valuing Altium at $3.91 billion. That’s not much lower than Siemens paid for the considerably larger and more profitable Mentor Graphics in 2107. Yet Altium thinks it can do better.

It just might. Autodesk’s bid prices each Altium share at AU$38.50, a 41.5% premium over Altium’s closing price on Jun. 4 and a premium of over 47.4% to the one-month volume-weighted average price. Prior to the offering, however, Altium’s stock had peaked at a 52-week high of AU$39.34 in last October. So at $38.50, Autodesk was actually underbidding a bit.

An Autodesk-Altium merger wouldn’t change the face of the ECAD industry immediately. Altium would still run neck-and-neck with Zuken for third place in revenues behind Cadence and Mentor. But it would give Altium the backing of a industry leader in 3-D CAD, and accelerate the inevitable MCAD-ECAD merger.

Eagle’s New Nest

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It’s been almost a month since Autodesk acquired Cadsoft, and more importantly, its Eagle line of CAD tools, from distributor Premier Farnell. Yet there’s been nary a peep from Autodesk on how it plans to adopt or implement its new toys.

Autodesk, of course, is a developer of 3D design software for a variety of uses, including engineering. The companies had an existing relationship leading up to the sale. Newark element14, a Premier Farnell subsidiary, has been distributing Autodesk’s MCAD tools since last year.

I understand why CAD tools appeal to distys: they represent an opportunity to lock in customers by leveraging the designer’s favorite tool to act as a conduit to ordering parts. And Premier Farnell wasn’t alone in this regard. Mentor and Digi-Key teamed up in late 2014 to offer a simplified flow of schematic and layout tools. (While that arrangement still exists, there’s been precious little news about it since its launch.)

But distribution and software development are too very different animals. Neither one is easy, and they require different skill sets and strategies. I’m not surprised, then, that Premier Farnell decided to cut bait.

The deal from Autodesk’s perspective is infinitely more intriguing. It’s a $2.5 billion software company that has built its name on easy-to-use 3D modeling tools. It says its goal is to “provide the world’s most innovative, and engaging design software and services … to digitally visualize, simulate, and analyze projects.”

Will Eagle go the way of Ohio Design Automation, which was purchased by PTC in 2004, and whose flagship electronic design verification product InterComm is now rolled up into PTC’s Creo flow?

I don’t think so. As the MCAD/ECAD link grows tighter, Autodesk almost assuredly will be looking to leverage Eagle with its extensive customer base. Eagle’s cost structure may change: Premier Farnell knocked the higher-end commercial version prices down quite a bit. But when Autodesk breaks its silence on Eagle, I think it will be in a big way.