Siemens has reached an agreement to acquire Altair Engineering Inc., a prominent provider of software in the industrial simulation and analysis sector. Altair shareholders will receive USD 113 per share, reflecting an enterprise value close to USD 10 billion.
This offer represents a 19% premium over Altair’s closing price on October 21, 2024, the last trading day before reports surfaced about a potential deal. This acquisition enhances Siemens’ stature as a leading technology firm and solidifies its dominance in industrial software.
“Acquiring Altair is a pivotal moment for Siemens. This strategic investment supports our goal to expedite the digital and sustainable transformations of our clients by merging the physical and digital realms. Integrating Altair’s strengths in simulation, high-performance computing, data science, and artificial intelligence with Siemens Xcelerator will yield the most comprehensive AI-driven design and simulation portfolio globally,” stated Roland Busch, President and CEO of Siemens AG.
“The acquisition of Altair is highly synergistic, reinforcing Siemens’ disciplined capital allocation, which balances investments and shareholder returns based on a robust balance sheet. We anticipate that the transaction will be EPS accretive two years after closing,” noted Ralf P. Thomas, CFO of Siemens AG.
“This acquisition marks the culmination of nearly 40 years during which Altair has evolved from a Detroit startup into a premier software and technology company. We have attracted thousands of global customers in manufacturing, life sciences, energy, and financial services, while fostering an exceptional workforce and innovative culture,” remarked James Scapa, Altair’s founder and CEO.
By integrating Altair’s complementary simulation portfolio, which excels in mechanical and electromagnetic capabilities, we are enhancing our comprehensive Digital Twin to offer a full suite of physics-based simulation solutions as part of Siemens Xcelerator.
Altair’s data science and AI-driven simulation tools enable users, from engineers to generalists, to access simulation expertise, reducing time-to-market and expediting design iterations. Furthermore, Altair’s data science capabilities will leverage Siemens’ industrial expertise in product lifecycle and manufacturing processes.
Significant synergies and EPS accretion
The transaction is set to significantly boost Siemens’ digital business revenue by over 8%, contributing approximately EUR 600 million to the reported EUR 7.3 billion in digital business revenue for fiscal year 2023.
Siemens anticipates achieving considerable revenue synergies, particularly through cross-selling their highly complementary portfolios and granting Altair full access to Siemens’ extensive global presence and industrial customer base, with a projected revenue impact exceeding USD 500 million annually in the mid-term, increasing to over USD 1 billion annually in the long term.
Additionally, Siemens aims to realize cost synergies in the short term, targeting an EBITDA impact of more than USD 150 million per year by the second year following the acquisition.
The transaction is expected to be EPS (pre-PPA) accretive by the second year after closing. This acquisition will be entirely financed in cash from Siemens’ existing resources, leveraging its strong balance sheet, which is supported by an exceptional credit rating that Siemens is committed to maintaining. Preemptive deleveraging will be facilitated by significant cash proceeds from the recently completed Innomotics divestment.
Furthermore, Siemens has considerable financing potential from selling shares in publicly traded entities. The completion of this transaction is subject to standard conditions and is anticipated in the second half of calendar year 2025.
Source :Siemens
