Industrial IOT company PTC is acquiring Onshape, creators of a Software as a Service (SaaS) product development platform that unites computer aided design (CAD) with data management and collaboration tools. The amount of the acquisition is about $470 million, net of cash acquired. The deal is expected to close in November 2019.

PTC said acquiring Onshape “is expected to accelerate PTC’s ability to attract new customers with a SaaS-based product offering and position the company to capitalize on the inevitable industry transition to SaaS.”

Cambridge, Mass.-based Onshape was founded in 2012 in part by Jon Hirschtick, John McEleney, and Dave Corcoran, inventors and former executives of SolidWorks. Onshape has secured more than $150 million in funding from leading venture capital firms and has more than 5,000 customers around the world.

Onshape’s software is delivered in a SaaS model, making it accessible from any connected location or device, eliminating the need for costly hardware and administrative staff to maintain. Onshape exhibited and spoke exhibited at the Robotics Summit & Expo 2019, which is produced by The Robot Report, to highlight challenges for modern robotics designers.

“PTC has earned a reputation for successfully pursuing new innovations that drive corporate growth,” said Jim Heppelmann, president and CEO, PTC. “Building on the strong momentum we have with our on-premises CAD and PLM businesses, we look to our future and see a new growth play with SaaS.”

PTC said the acquisition is another step in its evolution to a recurring revenue business model. “Today, we see small and medium-sized CAD customers in the high-growth part of the CAD market shifting their interest toward SaaS delivery models, and we expect interest from larger customers to grow over time,” continued Heppelmann. “The acquisition of Onshape complements our on-premises business with the industry’s only proven, scalable pure SaaS platform, which we expect will open new CAD and PLM growth opportunities while positioning PTC to be the leader as the market transitions toward the SaaS model.”

Onshape will operate as a business unit within PTC. Onshape management will report directly to Heppelmann.

“At Onshape, we share PTC’s vision for helping organizations transform the way they develop products,” said Hirschtick, Onshape CEO and Co-founder. “We and PTC believe that the product development industry is nearing the ‘tipping point’ for SaaS adoption of CAD and data management tools. We look forward to empowering the customers we serve with the latest innovations to improve their competitive positions.”