Autodesk: Expanding Offerings Through Acquisitions

Software manufacturer Autodesk Inc. has been busy in 2005 with acquisitions that the company hopes will strengthen its position in various markets.

Most recently, the company acquired Toronto-based Alias Systems Corp., a manufacturer of 3-D graphics technology. The San Rafael, Calif.-based company made the $182 million purchase of Alias to grow its offerings for the media, entertainment, consumer products and automotive markets.

Earlier in the year, the company agreed to terms with European data management software manufacturer COMPASS systems GmbH for 13 million euros, or US$17 million, to gain ground in the product lifecycle management market.

Known for its computer-aided drafting programs, Autodesk, one of IndustryWeek's IW 50 Best Manufacturing Companies for 2005, expects these acquisitions will enhance many of its other offerings. Alias' product lines comprise sketching, animation, visual effects, design, modeling, rendering and reviewing solutions. Alias' Motion Builder, FBX and Maya, which earned Alias an Academy Award in 2003 for scientific and technical achievement, will add to Autodesk's film and video and interactive game product lines. Alias StudioTools adds industrial design and high-end visualization capabilities to Autodesk's manufacturing solutions.

Autodesk Inc. At A Glance Autodesk Inc. San Rafeal, Calif. Primary Industry: Publishing and Printing Number of employees: 3,866 2004 In Review Revenue: $1.2 billion Profit Margin: 18.30% Sales Turnover: 1.1 Inventory Turnover: 11.3 Revenue Growth: 29.6% Return On Assets: 21.8% Return On Equity: 35.6%

"The acquisition brings a highly talented group of individuals, a wealth of technologies and a great set of products" said Carl Bass, COO of Autodesk, in an Oct. 4 press release. "Alias' technology spans several of our most important markets and augments the synergy between our design and media businesses. Our design customers are demanding more powerful visualization, animation and publishing capabilities. Our media and entertainment customers are increasingly using the data created by our design applications for broadcast, film and game projects. By combining the technology and talents of our two companies, we will be better able to continue delivering solutions that address our customers' complex needs."

The acquisition of Alias allows Autodesk to offer a front-end design extension to its concept-to-manufacture product lifecycle management solution. It will enable design collaboration professionals to conceptualize and present their ideas with StudioTools' photo-realistic, studio-quality 3-D visualization and simulation technology, and engineers can complement the software with Autodesk's Inventor software to model solids and product functionality.

StudioTools also gives Autodesk footing in the automotive and consumer goods markets. Alias manufactures software for nearly all automotive manufacturers and consumer products manufacturers, including Kodak, Mattel, Sharp, Timex and Trek Bicycle, according to the press release.

With the acquisition of COMPASS, Autodesk was able to expand its data management solution and provide a comprehensive data management solution for small- and medium-sized manufacturers.

Though he wouldn't say whether future acquisitions are in the works, Robert Kross, vice president of Autodesk's Manufacturing Solutions Division, says they are possible.

"We always look for ways to add value to our customers, and if we can acquire, we're happy to do so" Kross says. "We've learned how to make acquisitions work. They're hard to do, particularly in software companies. But my division has done probably seven in the last two years, and I think it's helped us with really strong people and new solutions for our customers, so we always look."

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