Autodesk absorbs Alias for US$182 million

The maker of popular rendering software AutoCAD late Tuesday announced it will acquire Toronto-based 3D graphics software developer Alias for US$182 million in an all cash transaction.

With the deal, Autodesk Inc. is looking to grow its existing product portfolio in the design and media and entertainment markets. The San Rafael, Calif.-based company expects that the transaction will close within the next four to six months.

“We saw a unique opportunity with the technology that Alias had – both in the media and entertainment division but also in the manufacturing division,” said Maurice Patel, head of product marketing, media and entertainment, at Autodesk’s office in Montreal. “It’s a natural organization for us to be in discussion about how as a combined organization we would be able to deliver the best of breed technology and a wider range of solutions to a broader market.”

Founded in 1983 as Alias Research, the company, most famously known for its Academy Award-winning 3D application Maya, has a long list of high profile customers in the entertainment and manufacturing sectors including Dreamworks, Nintendo and General Motors. Alias revenues were $83 million in the fiscal year ended June 30, 2005.

Company president and chief executive officer Doug Walker said Alias wasn’t looking to be acquired when Autodesk first approached the company earlier this year.

“Things were going very well for us and sometimes that attracts companies to take a look at you,” said Walker, who confirmed Wednesday he will remain with the company until the integration process is complete. “The fit makes perfect sense. Most of our products are complimentary.”

Alias’ product lines, for example, include sketching, animation, visual effects, design, modeling, rendering and reviewing tools. Products like Alias MotionBuilder, a 3D  character animation tool, and Alias FBX, used in the exchange and use of 3D content, will supplement Autodesk’s film and video and interactive game software. On the manufacturing side, Alias StudioTools, intended for design tasks like 2D sketches, will add industrial design and visualization capabilities to Autodesk’s flagship line of manufacturing products, including AutoCAD.

Outside of the synergies between the two firms’ product lines, the growth of 3D visualization manufacturing tools will, in part, be fueled by better graphics and visualization capabilities supported in Microsoft’s upcoming OS release, Vista, according to Warren Shiau, analyst at The Strategic Counsel.

“This may not have been so big on the Microsoft side of things before as compared to the Apple side of things,” said Shiau. “People who are on Microsoft as a platform using design tools are going to start thinking about better visualization. Acquiring Alias to get that technology with its tools probably makes a fair amount of sense for Autodesk.”

Both companies have set up an integration team but are not revealing any specific details on product development until the deal closes several months from now. Autodesk did say, however, that it plans to keep Alias’ two development centres in Toronto and Montreal open.

“We’re looking at how we’d integrate these two companies most effectively,” said Patel. “The key is to have as minimal a disruption in the integration process to the product development cycle.”

Two companies will focus on integration and interoperability between the products. While Alias will be folded into Autodesk, the company plans to keep the Alias brand name.

“We’ll be looking for ways to make the technologies interoperate better together in terms of being able to share data more effectively or create new workflows for customers within the sets of products that are more streamlined,” said Walker.

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