Sandvik will acquire CNC Software Inc.

Sandvik has signed an agreement to acquire U.S.-based CNC Software Inc., a leading provider of CAD/CAM software solutions for manufacturing industries and the company behind Mastercam, the most widely used Computer Aided Manufacturing (CAM) brand in the industry. CNC Software will be reported in the Design & Planning Automation division within Sandvik Manufacturing and Machining Solutions.

By acquiring CNC Software, Sandvik gains a world-class CAM brand in the Mastercam software suite with an installed base of around 270,000 licenses/users, the largest in the industry, as well as a strong market reseller network and well-established partnerships with leading machine makers and tooling companies.

CNC Software has a strong market position in CAM, and particularly for small and medium-sized manufacturing enterprises (SME’s), something that will support Sandvik’s strategic ambitions to develop solutions to automate the manufacturing value chain for SME’s – and deliver competitive point solutions for large original equipment manufacturers (OEM’s). Combining the strengths of Mastercam with Sandvik’s offering and know-how within machining is expected to be an important enabler in automating the customers’ end-to-end manufacturing processes.

CNC Software is an independent, family-owned company founded in 1983, headquartered in Tolland, Connecticut, USA, with 220 employees. The revenue for 2020 totaled USD 60 million with an EBIT margin of 25-30 percent, and of which the share of recurring revenue was approximately 60 percent. CNC Software has had a historical annual growth rate of approximately 10 percent and is expected to outperform the estimated market growth of 7 percent.

The underlying EBITA margin is accretive to Sandvik Manufacturing and Machining Solutions. However, the first year after closing date, revenues will be impacted by deferred revenue accounting adjustments, and the EBITA margin will be slightly dilutive to Sandvik Manufacturing and Machining Solutions.

Courtesy of Sandvik.

Image credit: Mastercam