To strengthen its grip on structural fabrication and detailing
) recently announced its decision to acquire some of the
technology assets of Graitec, including its Advance Steel and
Advance Concrete product lines and the employees of the concerned
divisions of the company.
The proposed acquisition will help Autodesk to play a pivotal
role in the industry's migration to Building Information Modeling
(BIM) and the development of model-based workflows for structural
engineers, detailers, fabricators and contractors. The
acquisition is expected to be completed during the fourth quarter
of fiscal year 2014. However, financial details of the
transaction were not divulged.
Autodesk has always adopted an aggressive acquisition strategy
to develop its business over the last couple of years. The
company acquired four companies and nine business combination and
technology units during fiscal 2013, for a total of $273.3
The company continues to expand its product portfolio through
the acquisition of small start-ups that are easy to integrate
into its own business line. We believe that Autodesk will
continue to pursue strategic acquisitions in order to expand its
offerings over the long term.
Although acquisitions are good for the company but it will
take considerable amount of time for the company to gain from
these acquisitions. We are concerned about the decline in the top
Revenues declined for the second straight quarter (down 1.2%
in the second quarter), primarily due to a downturn in some of
the company's end markets, which negatively impacted the
company's products like AutoCAD and AutoCAD LT in the
In spite of considerable efforts, the company is witnessing
revenue decline in the different geographical regions. The global
markets have not fully recovered from the great recession. Most
of them, particularly Southern and Central Europe, emerging
economies and BRIC (Brazil, Russia, India and China) countries,
continue to suffer from volatile macro-economic conditions.
We believe that this will remain a major headwind over the
next couple of years. So, it might be difficult for the company
to reap benefits from these acquisitions. Autodesk is focusing on
expanding its mobile applications for both
) iOS and
) Android platform, which will further drive market share, going
However, sluggish macro-economic environment, weakness in
emerging markets, customer concentration and increasing
Adobe Systems Inc.
) are the major concerns. Moreover, continued investments in new
acquisitions are expected to hurt margins in the near term.
Currently, Autodesk has a Zacks Rank #5 (Strong Sell).
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