News from PTC: PTC Acquires Arbortext FAQ

PTC to Acquire Arbortext - Frequently Asked Questions

On July 6, 2005, PTC (Nasdaq: PMTC) announced it has entered into a definitive agreement to acquire Arbortext, a privately held dynamic enterprise publishing company, for $190 million. This FAQ is intended to help PTC and Arbortext customers, partners, media and shareholders answer immediate questions. Once the acquisition closes and integration begins, customers and partners will receive additional information from PTC and Arbortext.

Q: Who is PTC?

A: PTC is a leading provider of product lifecycle management software solutions to more than 35,000 customers worldwide. PTC customers include many of the world's most innovative manufacturing companies in the aerospace & defense, automotive, consumer, electronic & high tech, industrial equipment and medical products industries. PTC is based in Needham, Massachusetts and has 3,300 employees in more than 20 countries around the world.

Q: Who is Arbortext?

A: Arbortext is a leading provider of dynamic enterprise publishing software, enabling companies around the world to automate the assembly and publishing of product information, marketing documents, service instructions, maintenance procedures, technical publications, legal information and software documentation. Arbortext software allows companies to efficiently and cost-effectively publish to multiple audiences in multiple languages in multiple hardcopy and electronic output formats. As a result, companies can dramatically improve authoring productivity, reduce translation and publishing costs, enhance information quality and speed time-to-market of new products. Arbortext is based in Ann Arbor, Michigan and has 250 employees around the world. Arbortext generated approximately $40 million of revenue during the 12-month period ended June 30, 2005.

Q: What are the financial terms of the transaction?

A: PTC will pay Arbortext $190 million in an all-cash transaction. Other financial terms were not disclosed.

Q: When is the acquisition expected to close?

A: PTC expects the acquisition to close by the end of July 2005, subject to customary conditions such as regulatory approval. PTC has already received approval from Arbortext's shareholders.

Q: Why did PTC acquire Arbortext?

A: PTC is constantly evaluating opportunities to grow revenue and earnings by strengthening or expanding our solutions offerings. PTC expects that Arbortext's market-leading technology and expertise will help accelerate PTC's growth. The acquisition will help us extend our capabilities into the area of dynamic enterprise publishing, furthering our customers' ability to quickly and efficiently publish necessary product- or service-related information. Whether for documentation purposes or regulatory compliance, Arbortext will provide PTC customers with capabilities that will allow them to speed time-to-market and reduce the associated cost of publishing. In addition, the acquisition of Arbortext will allow PTC to expand its footprint into new vertical markets such as pharmaceuticals, financial services, publishing and government.

Q: How will the Arbortext solutions complement the PTC product portfolio?

A: PTC and Arbortext solutions are complementary and there is no capability overlap. With this acquisition, PTC can deliver Arbortext's solutions in conjunction with PTC's product development system for the benefit of PTC's existing customers. For example, manufacturing companies will now be able to develop assembly instructions, maintenance manuals, test plans, and owner's manuals, concurrently with the development of their products. These documents will be associative with the product model, enabling product changes to be reflected immediately in the documents. Furthermore, the documents will be relevant for their audiences and can be published on demand. Additionally, PTC will maintain the flexibility and openness of Arbortext and our own solutions to work with a variety of information sources, content management systems and other enterprise software solutions for the benefit of existing and potential customers.

Q: Why is this good for both companies' customers?

A: PTC provides Arbortext with global distribution, services and additional R&D capacity to help expand customer support and address customer requirements. Arbortext provides PTC with new solutions that will help elevate the value of information, including engineering content created and managed by PTC solutions, throughout the enterprise via the timely delivery of a variety of documents.

Q: How will this transaction impact PTC financially?

A: PTC believes that the acquisition of Arbortext will help accelerate the growth of PTC and Arbortext products over time. PTC expects to update its revenue and earnings guidance upon the close of this acquisition.

Q: What will be the impact on the PTC and Arbortext organizations?

A: The integration will take place throughout the remainder of calendar year 2005. Ray Schiavone, Arbortext's CEO, will report to Dick Harrison, focused on helping to integrate the businesses in a way that ensures Arbortext is positioned to continue its track record of delivering customer value. Arbortext sales and services will continue to provide dedicated support to Arbortext accounts. As we integrate the businesses in the coming months, more details will be provided to PTC and Arbortext customers.

Q: How will this acquisition affect the development of Arbortext's product line?

A: PTC wants to ensure that Arbortext's products grow and thrive in the emerging dynamic enterprise publishing market, which is expected to grow for years to come. Therefore, PTC is excited to continue the research and development of Arbortext's product line. As one of the world's leading XML authorities and innovators in the technology industry, PTC recognizes the significant talent and expertise of Arbortext's R&D organization and PTC will benefit from the addition of this team. Additionally, we can help accelerate the delivery of new capabilities in Arbortext's products by taking advantage of PTC's strong global software development organization, consisting of over 1,000 employees.

Q: Who should customers or partners contact if they have questions about the acquisition?

A: PTC and Arbortext have a comprehensive communications program for both companies' customers and partners. If after reviewing the information posted on both companies' websites and other communications vehicles you have remaining questions, please contact your current PTC or Arbortext account representative.

Q: How does this transaction fit into PTC's acquisition strategy?

A: PTC's acquisition strategy is to acquire companies that will help PTC to meet our customer requirements and that fit with our overall corporate growth and product strategies. Arbortext's market-leading products can be leveraged across our customer base with our strong distribution model, and provide PTC the opportunity to expand its footprint in to new markets, making it an ideal acquisition opportunity for PTC. In particular, PTC customers have asked PTC to provide a solution like Arbortext's, tightly integrated with PTC's product development system. This creates an opportunity for PTC to deliver a truly unique solution and accelerate the growth of our combined products and services.

About PTC

PTC (Nasdaq: PMTC) provides leading product lifecycle management (PLM), content management and dynamic publishing solutions to more than 50,000 companies worldwide. PTC customers include the world's most innovative companies in manufacturing, publishing, services, government and life sciences industries. PTC is included in the S&P Midcap 400 and Russell 2000 indices. For more information on PTC, please visit http://www.ptc.com.