Sandvik has signed a deal to acquire Vericut developers CGTech, enhancing Sandvik’s ability to provide full machining solutions and increase its value proposition. CGTech will join Sandvik Coromant, a division within Sandvik Machining Solutions.

The product offering includes Vericut, a machining simulation and optimisation software, which is machine tool manufacturer and cutting tool neutral and works stand alone or in conjunction with all major CAM suppliers.

“This is in line with our strategic focus to grow organically and through acquisitions in the digital manufacturing space, with a special focus on software solutions close to machining,” says Stefan Widing, president and CEO of Sandvik.

Sandvik hopes the combined machining expertise of Sandvik Coromant and CGTech will enhance the companies’ capabilities in machining intelligence, strengthen the software offering and facilitate an improved presence in key areas of the customer value chain.

“It’s exciting to say that we are able to expand our capabilities with CGTech. This will not only strengthen our leading market position in all parts of the world but will enable us to take a big step forward in offering full machining solutions to our customers, which will reduce waste significantly in their broader value chain,” Nadine Crauwels, president of Sandvik Machining Solutions, says.

The transaction is expected to close during the last quarter of 2020 and is subject to customary regulatory approvals. CGTech is headquartered in California, USA, and has about 180 employees. In 2019, CGTech had revenues of about SEK 470 million and an EBIT margin slightly dilutive to Sandvik Manufacturing and Machining Solutions’ margin. Impact on Sandvik’s earnings per share will initially be neutral.