Altium buys software developer Morfik in $3 million deal

Electronics design company Altium has announced it will acquire online web tool development group Morfik in a deal worth about $3 million, with the company saying its goal will be to create software infrastructure ecosystems similar to the Apple App Store.

The scrib deal will see Altium swap 13.3 million ordinary shares for 100% of Morfik’s shares. Yesterday Altium shares jumped 66% to trade at $0.25.

Altium spokesperson Alan Smith said the company has used Morfik’s technology and development tools for several years, and the deal will go a long way to completing Altium’s goal of creating an ecosystem for software developers.

“Buying that Morfik technology and using that allows us to bring the two companies together in a way we think is quite powerful. With that tech we’re going to do two things – bring content to our users, and keep that electronic design system living and breathing.”

“Morfik has a great team of expert software developers creating very structured, web infrastructure for themselves and clients. What we’re going to do is expand that product to other designers.”

Altium was founded in 1985 and creates electronic design software for engineering companies, allowing engineers to design circuit boards and other products. Morfik is relatively new, having formed in 2000, and designs and creates cloud-based software tools.

Smith says by combining actual electronic hardware with web-based software, companies will be able to create cloud-based systems that control any type of electronic device, including everyday appliances like kitchenware.

“We think the future is that electronic products are going to be connected to each other. Imagine a car manufacturer being able to connect car engines to a computer, and download software updates. Or imagine other people selling programs as part of that software infrastructure, selling their own tuning programs or so on.”

“This is the same type of experience people have with their iPhones and iPods now, because the infrastructure is so great. That system is an analogy for what we think can work for other types of electronics like cars and even kitchenware, or electricity grid meters. The ability to get software updates directly makes it work.”

Morfik does have some experience with the Apple infrastructure, having developed its own iPhone apps development kit. It also has extensive experience with the WebOS platform, used on Palm’s handsets.

The acquisition comes during a tumultuous period for Altium. Just recently it reported a $US10.4 million loss for the 2010 financial year, with sales down 10% to $US46.5 million. But Smith says the result is no surprise given the impact on the engineering sector.

“Given the environment in the last 18 months or so, it comes as no surprise there has been a dip in sales and our losses. But that hasn’t diverted us from what we’re more interested in doing, which is continuing with this software and making an ecosystem we think designers will be able to use.”

However, Smith did say the company will be “carefully managing the business on the cost-management side of things”.