Dassault Systemes and Centric Software to achieve digital transformation, speed to market and innovation for fashion companies
Centric Software’s PLM solutions generate fast ROI for fashion brands to respond to on-trend, on-demand consumers
Centric Software’s globally-recognized customers include Auchan, Belle China, Bestseller, Fast Retailing, Kering Group, Li & Fung, Loblaws, LVMH, Mango, PVH, Ruyi Group, Under Armour and others
VELIZY-VILLACOUBLAY, France- Dassault Systemes (Euronext Paris: #13065, DSY.PA) today announced that it has entered into a definitive agreement to acquire a majority stake in Centric Software, a privately-owned industry market leader driving digital transformation with software innovation in the fashion, apparel, luxury and retail sectors.
With this investment, Dassault Systemes aims to accelerate the digital transformation of companies seeking solutions for the increasingly complex development of collections that respond to today’s on-trend and on-demand consumers, representing a multi-billion dollar total addressable market.
Headquartered in California’s Silicon Valley and with offices in 13 countries, Centric Software provides product lifecycle management software solutions to more than 600 globally-recognized brands including ASICS, Bass Pro, Belle China, Bestseller, Etam, Kate Spade, Loblaws, Louis Vuitton, Michael Kors, Samsonite, Ted Baker, Tommy Hilfiger and others. In 2017, Centric Software grew over 60 percent for a revenue of $61 million and generated positive net income. Centric’s industry-specific collaborative PLM platform is used for merchandise planning, product specifications, materials management, product sourcing, cost scenarios, collection management, calendar management and quality management, on desktop and also optimized for mobile devices, to increase efficiency, accelerate time to market, and improve sales and product margins.
“As we are connecting the dots of the value network for customers in 12 industries and 70 segments, we understand the specific needs of the sectors that launch their products by collection,” said Bernard Charles, Vice Chairman and CEO, Dassault Systemes. “Centric Software is joining us with a market-leading, well-tailored, configurable PLM solution and a great team of experts fully dedicated to making these particular customers successful. Together, we are going to accelerate their transformation with PLM and create even more business value with our 3DEXPERIENCE industry processes. As we did for SOLIDWORKS 20 years ago, we will keep Centric Software independently operated.”
Today’s consumers are more knowledgeable about products than ever before, quickly defining and following trends in a world where the digital and physical converge. Competitive apparel and fashion brands are scrambling to meet their expectations for on-trend and on-demand products by increasing the number of collections they produce each year and accelerating their launch. For thousands of companies, this challenge requires last-minute decision-making and the need to reconfigure business processes for product creation through market launch quickly without eroding margins or product quality.
“By partnering with Dassault Systemes, Centric Software will have the backing of a world-leading innovation company,” said Chris Groves, President and CEO, Centric Software. “Our combined expertise in digital transformation, PLM and the 3DEXPERIENCE platform will allow us to accelerate the development of market-driven innovations to help our customers develop a competitive advantage and fuel growth.”
“I look forward to Centric Software partnering with Dassault Systemes to leverage two, world-class, innovative companies as they enable, accelerate and deliver the most fundamentally disruptive, purpose-built solutions for a vast yet radically underserved industry yielding compelling economic efficiencies of end-to-end digital transformation,” said Bandel Carano, Managing Director, Oak Investment Partners, an investor in Centric Software.
Under the terms of the agreement, Dassault Systemes will acquire for cash a majority ownership of Centric Software, which will be comprised between 58 and 69 percent depending on the Centric Software shareholders’ election, and an advance payment on the acquisition of the remainder of the shares, which will take place in 2020 and 2021. The total consideration for the acquisition of 100 percent of Centric Software’s equity will depend on Centric Software’s revenue growth and profitability in the two years to come, and will be comprised between four and six times 2019 and 2020 revenues.
Shearman & Sterling LLP acted as legal counsel to Dassault Systemes and Union Square Advisors LLC acted as exclusive financial advisor and DLA Piper as legal counsel to Centric Software in connection with the transaction.
Comments on this acquisition will be made during Dassault Systemes’ Capital Markets Day, which will be held on June 15, 2018. A webcast of the Capital Markets Day including Centric Software acquisition comments and a Q&A will be available that afternoon by accessing http://www.3ds.com/company/finance/.