Technology
Tuesday, January 16th, 2024 4:20 pm EDT
Key Points
- Major Tech Acquisition: Semiconductor design and software firm Synopsys has announced the acquisition of Ansys, an engineering and product design software company, in a cash-and-stock deal valued at approximately $35 billion. This deal ranks as one of the largest tech deals in recent years, signifying a significant move in the technology industry.
- Deal Structure and Financials: Synopsys will pay about $390 per share for Ansys, consisting of $197 per share in cash and approximately one-third of a Synopsys share for each Ansys share. The deal is anticipated to close in the first half of 2025, subject to regulatory and shareholder approval. Ansys shareholders will hold a 16.5% stake in Synopsys post-merger. The financing includes $16 billion in debt financing and $3 billion non-equity consideration from Synopsys’ cash reserves. As of October 31, 2023, Synopsys reported cash and cash equivalents of $1.4 billion.
- Market Reactions and Strategic Outlook: Synopsys shares rose by 3% on the morning of the announcement, recovering from a 12% slump since The Wall Street Journal reported advanced talks in December. Ansys shares slipped 4% but showed an overall gain of more than 14% during the same period. The deal is not expected to be immediately accretive, with Synopsys CFO Shelagh Glaser stating that accretion is anticipated at least a year after the deal concludes. Synopsys CEO Sassine Ghazi expressed enthusiasm about the acquisition, highlighting the logical progression following a successful seven-year partnership with Ansys and emphasizing collaboration for the benefits of customers, shareholders, and employees.
Semiconductor design and software firm Synopsys has unveiled plans to acquire Ansys, an engineering and product design software company, in a cash-and-stock deal valued at approximately $35 billion. This landmark acquisition is positioned as one of the largest tech deals announced in recent years. Synopsys will pay around $390 per share, comprising $197 per share in cash and approximately one-third of a Synopsys share for each Ansys share. The deal, subject to regulatory and shareholder approval, is expected to be completed in the first half of 2025. Despite Synopsys shares experiencing a 12% decline since The Wall Street Journal reported advanced talks in December, they rose 3% on Tuesday morning. Ansys shares slipped 4% but reflected an overall gain of more than 14% during the same period.
Following the merger, Ansys shareholders will hold a 16.5% stake in Synopsys, as revealed by Synopsys CEO Sassine Ghazi during a conference call. The deal’s financing structure includes $16 billion in debt financing and $3 billion in non-equity consideration from Synopsys’ cash reserves. As of the quarter ending October 31, 2023, Synopsys reported cash and cash equivalents of $1.4 billion. Despite the substantial financial commitments, the deal is not anticipated to be immediately accretive, with Synopsys CFO Shelagh Glaser indicating that accretion is not expected until at least a year after the deal concludes.
Synopsys CEO Sassine Ghazi expressed enthusiasm about the acquisition, highlighting it as the logical next step following a successful seven-year partnership with Ansys. Ghazi looks forward to collaborating closely with Ansys CEO Ajei Gopal and the Ansys team to realize the benefits of this combined venture for customers, shareholders, and employees. The announcement comes against the backdrop of several other notable tech deals, such as Microsoft’s acquisition of Activision Blizzard and Broadcom’s acquisition of VMware. Cisco also announced a significant $28 billion acquisition of Splunk in September 2023, marking its largest-ever deal.
The acquisition was advised by Evercore and Cleary Gottlieb Steen & Hamilton for Synopsys, while Qatalyst Partners, Skadden, and Goodwin Procter served as advisors for Ansys. As technology companies continue to engage in strategic mergers and acquisitions, the Synopsys-Ansys deal underscores the dynamic landscape and ongoing consolidation within the tech industry.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/01/16/synopsys-to-acquire-ansys-in-35-billion-graphics-software-deal.html
