Autodesk to Buy Construction Startup PlanGrid for $875 Million

Design and architecture software maker Autodesk has confirmed its investment in construction software technology by announcing its plan to purchase startup PlanGrid.

The $875 million deal represents the biggest ever acquisition for Autodesk. It also marks the first big acquisition for CEO Andrew Anagnost, who took over Autodesk 16 months ago.

PlanGrid specialises in productivity construction software that enables workers to manage and collaborate on virtual blueprints at construction sites. The company has raised approximately $69 million from individual investors like David Sacks and Ron Conway in addition to large firms like GV (formerly Google Ventures), Northgate Capital, and Sequoia Capital.

The PlanGrid software has been used in several major construction projects such as the headquarters of Nvidia, the graphics chipmaker; Highway 99 in Central Valley, California, and the California Pacific Medical Center in San Francisco.

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The construction software maker’s 400-person staff will join the construction business unit at Autodesk.

Mr. Anagnost stated earlier this month that Autodesk was planning a big push into the area of construction technology, which he believes is a logical progression from the company’s flagship software that helps companies with the design and conceptualisation of their products.

The CEO said that Autodesk wanted to bring manufacturing methods to the construction sector. He saw the construction market beginning to move in the same direction as cars and airplanes moves in the past and stated that buildings were going to be made the same way that airplnaes were put together.

Shares in Autodesk rose 6.9% to reach $131.48 in after-hours trading, indicating the enthusiasm on Wall Street for the deal. The company’s most recent earnings also rose. According to Autodesk, sales for the quarter ending last October 31st were up 28% year-over-year to reach $661 million.

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