DS takes majority position in Centric Software

Dassault Systèmes just announced that it will acquire a majority stake in Centric Software, the privately-held maker of PLM solutions for the fashion, apparel, luxury and retail sectors. DS said that, “with this investment, Dassault Systèmes aims to accelerate the digital transformation of companies seeking solutions for the increasingly complex development of collections that respond to today’s on-trend and on-demand consumers, representing a multi-billion dollar total addressable market”. Centric’s platform is used for planning, product specifications, materials management, sourcing, costing, quality, collection and calendar management — many areas that are fundamentally different from the PLM used in auto, aero and other discreet manufacturing industries.

DS also said that In 2017, Centric had revenue of $61 million, up over 60% on the prior year, and generated positive net income.

The deal is unusual: DS will acquire between 58% and 69% ownership of Centric, “depending on the Centric Software shareholders’ election” in exchange for cash and also give an advance payment for the remainder of the shares, which will change hands in 2020 and 2021. When all is said and done, and DS owns 100% of Centric, DS expects to pay between 4x and 6x 2019 and 2020 revenue, depending on growth and profitability.

More to come on this, too.