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Dassault buys fashion product lifecycle manager

France-head-quartered engineering software specialist Dassault Systèmes has made a surprise move to buy a majority of Centric Software, a  product lifecycle management software with some leading consumer fashion brands as customers. While Centric Software's PLM solutions claims to generate fast ROI for fashion brands responding to trends with consumers, it is less clear how this will work in other industries.

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

With this investment, Dassault Systèmes says it will 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.

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 Charlès, Vice Chairman and CEO, Dassault Systèmes. "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."

"By partnering with Dassault Systèmes, 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."

Under the terms of the agreement, Dassault Systèmes will acquire for cash a majority ownership of Centric Software, which will be comprised between 58% and 69% 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% 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.