Mirus Capital AdvisorsMirus Capital Advisors

Thursday, November 19, 2015

INTERNET of THINGS in Manufacturing Automation


I will be the first to admit that when PTC first declared they were going after the Internet of Things market back in 2013 with their acquisition of ThingWorx for $112M, I was skeptical.  When they spent another $170M the next year to further develop the space with their acquisition of Axeda I was dumbfounded.  Then I became curious, and now it seems like the Internet of Things is everywhere and PTC is looking very smart.  Retail, lifesciences, automotive, lighting; everyone is integrating internet access with more and more day to day items to allow for monitoring and optimization of use.  Design companies are even specializing in IoT integration and design.

In fact, Gartner Research estimates that by 2020 there will be over 25 Billion endpoint units connected to the internet and BI Intelligence estimates the software to drive it is close to a $200 Billion market today and will grow to approximately $600 Billion by 2019, a 44% annual growth rate (watch this spece for more on IoT in general over the next few months).  Not since the early days of CAD with the 2D to 3D and PC/Workstation revolutions have we seen growth rates this exciting.  It is no wonder so many manufacturing automation companies are jumping on the bandwagon.

Other PLM players have been jumping into various IoT domains as well as they search for ways to kick-start their slowing growth.  Dassault Systems has been recognized for Intelligent Virtual Store Design as part of their overall retail market push.  Extend the point application concept with Gartner’s Digital business vision and you no longer have isolated applications of cool technology, but completely integrated systems capable of monitoring behavior and even predicting the future.  In this light PTC’s recent acquisition of ColdLight Solutions predictive analytics comes into focus.   ESI has jumped into the IoT market with two acquisitions in IoT in the last 9 months, one for sensor simulation (Civitec) and another for data mining (Picviz Labs).  It will be interesting to see where this traditionally hard core analysis company takes these acquisitions.

In addition, there are a plethora of young aggressive technology companies now in the market making their way by creatively solving these issues while providing applications solutions to a variety of domains.  Many are well funded, others not so much and looking for backers.  Some have great technology, but haven’t been able to apply it.  Regardless of the company specifics, the IoT market is incredibly active space in M&A right now and looks like it will be for some time.  In just this past year, we at Mirus have engaged with a number of companies around M&A in IoT and it is rapidly becoming a major focus for the technology portion of our company as well as our manufacturing automation practice.

For more information on how IoT plays in Manufacturing Automation, please download a copy of our white paper on Mergers and Acquisitions in Manufacturing Automation for H1 2015.  Or for more information on specific acquisitions or to explore your IoT company’s marketability, please feel free to contact me at boes@merger.com and stay tuned to this space over the next couple of month as I look at M&A in IoT beyond manufacturing automation in some depth.

 

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