Autodesk Continues Acquisition Spree, Set to Buy Shotgun - Analyst Blog

Autodesk Inc. ADSK is on an acquisition spree. The company recently entered into a definitive agreement to buy Shotgun Software, a developer of cloud-based solutions for film, television and games industries.

Although the terms of the transaction were not revealed, Autodesk expects to complete the deal by the end of second quarter. The company expects the acquisition to have no impact on its May 15 guidance.

Shotgun's solutions are popular among production studios and managers as well as artists and supervisors. The company's software is scalable and easily integrates with Autodesk 3ds Max and Maya. It has more than 500 customers.

Autodesk has adopted an aggressive acquisition strategy over the last couple of years to develop its business. Its recent acquisitions are focused on expanding into the games and entertainment industry, which lowers overdependence on traditional markets like architecture, manufacturing and construction.

Autodesk recently bought Bitsquid AB, the Swedish creator of the Bitsquid 3D game engine. The Bitsquid engine has been used in a variety of games such as Paradox Interactive's War of the Roses and the upcoming Helldivers – Top Down Shooter for Sony's SNE PlayStation 4. Read: Autodesk Buys Bitsquid to Improve 3D Gaming.

In fiscal 2014, Autodesk acquired 14 companies that not only expanded its technological know-how but also strengthened its software developer bench. We believe that the company will continue to pursue acquisitions of small companies that are easy to integrate into its own business line.

Autodesk continues to invest in expanding its product portfolio that now includes new functionalities like composite analysis technology for its simulation offering. As a result, the company is seeing greater penetration in industries like aerospace and automotive.

We believe that Autodesk's new cloud-based offerings are gaining traction. The business transition to the cloud-based services will boost the company's profitability in the long run.

Moreover, the company's focus on expanding its mobile applications for both Apple's AAPL iOS and Google's (GOOGL) Android platform will further drive market share despite stiff competition.

Currently, Autodesk sports a Zacks Rank #2 (Buy).