Sandvik to acquire CNC Software Inc., leader in CAM software, creators of Mastercam

SANDVIKEN, Sweden, 25 August 2021 / PRNewswire / – Sandvik has signed an agreement to acquire US-based CNC Software Inc., a leading provider of CAD / CAM software solutions for manufacturing industries and the company behind Mastercam, the computer-aided manufacturing (CAM) brand most widely used in Industry. The CNC software will be part of the Design & Planning Automation division within Sandvik Manufacturing and Machining Solutions.

By acquiring the CNC software, Sandvik acquires a world-class CAM brand in the Mastercam software suite with an installed base of approximately 270,000 licenses / users, the largest in the industry, as well as a strong network of resellers in the market. and well-established partnerships with major machine manufacturers and tooling companies.

“This is in line with our strategic goal of growing in the digital manufacturing space, with particular focus on industrial software close to component manufacturing. The acquisition of CNC software and the Mastercam portfolio, in combination with our existing offerings and our extensive manufacturing capabilities, make Sandvik a leader in the global CAM market measured by installed base. CAM plays a vital role in the digital manufacturing process, enabling new and innovative solutions in automated design for manufacturing, ”says Stefan Widing, President and CEO of Sandvik.

CNC Software holds a strong position in the CAM market, and in particular for small and medium-sized manufacturing companies (SMEs), which will support Sandvik’s strategic ambitions to develop solutions to automate the manufacturing value chain for SMEs – and provide competitive, cutting-edge solutions for large original equipment manufacturers (OEMs). Combining Mastercam’s strengths with Sandvik’s machining offering and know-how is expected to be an important catalyst in automating customers’ end-to-end manufacturing processes.

“Mastercam will be the cornerstone of Sandvik’s CAM portfolio, further improving machining productivity by combining our machining know-how with their CAM expertise to improve quality and reduce waste for our customers. Specifically, we will leverage data capture and use to ensure efficient tool selection and optimization of toolpaths for our customers. I look forward to welcoming the CNC Software team to Sandvik, ”said Mathias johansson, President of the Design & Planning Automation division of Sandvik Manufacturing Solutions.

CNC Software is an independent family business founded in 1983, headquartered in Tolland, Connecticut, United States, with 220 employees. The turnover for 2020 amounts to $ 60 million with an EBIT margin of 25 to 30 percent, and whose recurring revenue share was around 60 percent. CNC Software has experienced a historic annual growth rate of around 10 percent and is expected to outperform estimated market growth by 7 percent.

The underlying EBITA margin is accretive for Sandvik Manufacturing and Machining Solutions. However, the first year after the closing date, revenues will be impacted by accounting adjustments for deferred revenues, and the EBITA margin will be slightly dilutive for Sandvik Manufacturing and Machining Solutions. The impact on earnings per share will initially be slightly negative.

Transaction costs are to be recognized in the third quarter of 2021 and estimated at 25 million Swedish kronor.

The parties have agreed not to disclose the purchase price. The deal is expected to be finalized in the fourth quarter of 2021, subject to customary regulatory approvals. Concurrent with the Closing, Sandvik will write down the overlapping assets representing 30 million Swedish kronor.

Conference call

There will be a conference call related to the proposed acquisition on August 27, 2021 To 13h00-14h00 CET for analysts, investors and the financial media. The conference call will also be available live in “listen-only” mode on the Sandvik website. Please see home.sandvik for connection details and presentation material available at approximately 12:30 p.m. CET.

Call numbers for the conference call:

SE: +46 8 566 426 93
United Kingdom: +44 333 300 90 31
United States: +1 646 722 49 56

Stockholm, 25 August 2021
Sandvik AB

For more information contact Louise Tjeder, Vice President Investor Relations, tel. : +46 70 782 6374 or Johannes Hellström, Press and Media Relations Manager, tel. : +46 70 721 1008.

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SOURCE Sandvik