Siemens AG has signed an agreement to acquire computational science and artificial intelligence leader Altair Engineering Inc.
The deal will solidify the German industrial conglomerate’s trajectory towards higher margin, software-driven product lines.
According to an Altair press note, Altair stockholders will receive $113.00 per share in cash, representing an equity value of approximately $10.6 billion, or an offer price representing a 19% premium to Altair’s unaffected closing price on Oct. 21, 2024.
The acquisition marks a significant milestone for Siemens, which has progressively evolved beyond its traditional industrial customers by boosting its digital offering.
READ MORE: Hannover Messe 2024: Open Ecosystems and Collaborations Steal the Show
“This strategic investment aligns with our commitment to accelerate the digital and sustainability transformations of our customers by combining the real and digital worlds,” said Roland Busch, president and CEO of Siemens AG. “The addition of Altair’s capabilities in simulation, high performance computing, data science, and artificial intelligence together with Siemens Xcelerator will create the world’s most complete AI-powered design and simulation portfolio.”
Busch characterized the acquisition as “a logical next step,” as the company has been investing in industrial software for the past 15 years.
The transaction was unanimously approved by the Altair Board of Directors and is expected to close in the second half of 2025.
Michigan-based Altair was founded in 1985 and is led by founder and chief executive officer, James Scapa. Altair provides engineering software (including AI, Data Analytics, High-Performance Computing and Simulation) to companies in the aerospace, automotive, energy and financial services industries.
“We have added thousands of customers globally in manufacturing, life sciences, energy and financial services and built an amazing workforce and innovative culture,” noted Scapa. “We believe this combination of two strongly complementary leaders in the engineering software space brings together Altair’s broad portfolio in simulation, data science and HPC with Siemens’ strong position in mechanical and EDA design. Siemens’ outstanding technology, strategic customer relationships and honest, technical culture is an excellent fit for Altair to continue its journey driving innovation with computational intelligence.”
More Notes on the Merger
- The transaction will increase Siemens’ digital business revenue by +8%, adding EUR ~600 million to Siemens’ digital business revenue of EUR 7.3 billion as reported in fiscal year 2023.
- Siemens expects to achieve significant revenue synergies especially from cross-selling of the highly complementary portfolios and from providing Altair full access to Siemens’s global footprint and global industrial enterprise and customer base with a revenue impact of more than USD 500 million p.a. mid-term growing to more than USD 1.0 billion p.a. long-term.
- Siemens aims to achieve cost synergies on a short-term basis, with an EBITDA impact of more than USD 150 million p.a. by year two post-closing.
- The transaction is expected to be EPS (pre-PPA) accretive by year two post-closing.
READ MORE: NX CAD Enhancements Boost Collaborative Design to the Cloud
