Thursday, February 19, 2004

Think3 gets another infusion, plans IPO

By Mike Boyer
The Cincinnati Enquirer

Think3 Inc., the engineering software supplier that moved to Cincinnati from Silicon Valley last fall, said it has obtained $11 million in new capital investment, the last step before an initial public stock offering, possibly later this year.

Menlo Park, Calif.-based DCM-Doll Capital Management made the investment. It's Think3's fifth round of venture capital funding since 1998, bringing the company's total valuation to more than $100 million, officials said.

Think3 provides software and services to help manufacturers design new products faster, reducing the cost of development.

Privately held Think3 bills itself as the fastest growing company in a $12 billion product design and data management industry broadly known as product lifecycle management. Last year, the company said it posted an 80 percent increase in revenue, to $35.2 million.

Headed by former Cadence Design Systems CEO Joe Costello, Think3 has grown out of an Italian software company known as Cad.Lab, which set up operations in Silicon Valley about six years ago. Costello has an ownership stake and Cad.Lab retains an interest.

The company has a staff of 15 at its headquarters in the Scripps Center in downtown Cincinnati and expects to hire about 10 more employees, said Dan Meyer, Think3's vice president of worldwide marketing.

Costello moved the company here to be closer to midsize manufacturers in the Midwest, the target market for its software and services. Think3 charges its clients an annual subscription fee rather than a software licensing fee.

In the fourth quarter, Think3 said its revenue grew more than 100 percent and added as clients GE Medical Systems; Display Pack, a packaging solutions manufacturer; Michael Graves Design, an architecture and interior design firm, and Maytag Corp.

Costello said the new equity investment increases Think3's financial flexibility as it prepares for an IPO, allows it to further improve its product offerings and explore possible acquisitions.

Meyer said the company's decision on an IPO will hinge on when managers think the company is ready to go public.

"We've set a number of internal milestones,'' he said.

Besides expanding its client list, Think3 has bolstered its leadership, adding former Andersen Consulting CEO George Shaheen and Macromedia Corp. CEO Rob Burgess to its board of directors late last year.


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