Siemens has confirmed a 10.6 billion USD deal to acquire Altair Engineering, with the companies expecting to complete on the merger in the second half of 2025 subject to customary conditions.
Altair shareholders will receive 113 USD per share, representing a 19% premium to Altair's unaffected closing price on October 21, 2024, the last trading day prior to media reports regarding a possible transaction. The acquisition will see Siemens integrate Altair's full range of products, including its generative design, implicit modelling, and additive manufacturing simulation tools.
Siemens has sought to acquire the industrial simulation firm to strengthen its position as a leader in industrial software. The company describes Altair's simulation capabilities as 'highly complementary' to its own product range, with the combined entity set to enhance its Digital Twin offering by delivering a 'full-suite, physics-based' simulation portfolio as part of Siemens Xcelerator. Altair's data science capabilities, Siemens says, will 'unlock Siemens' industrial domain expertise' in product lifecycle and manufacturing processes.
“Acquiring Altair marks a significant milestone for Siemens,” said Roland Busch, President and CEO of Siemens AG. “This strategic investment aligns with our commitment to accelerate the digital and sustainability transformations of our customers by combining the real and digital worlds. 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. It is a logical next step: we have been building our leadership in industrial software for the last 15 years, most recently, democratising the benefits of data and AI for entire industries.”
“The acquisition of Altair is highly synergistic, underpinning Siemens' stringent capital allocation, balancing investments and shareholder returns on the basis of a strong balance sheet. The transaction is expected to be EPS accretive two years post-closing,” added Ralf P. Thomas, CFO of Siemens AG.
James Scapa, Altair’s founder and CEO, offered: “This acquisition represents the culmination of nearly 40 years in which Altair has grown from a startup in Detroit to a world-class software and technology company. We have added thousands of customers globally in manufacturing, life sciences, energy and financial services, and built an amazing workforce, and innovative culture. 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.”
Siemens suggests the transaction will increase Siemens' digital business revenue by +8%, adding 600 million EUR to its 2023 digital business revenue of 7.3 billion EUR. The company also anticipates 'significant revenue synergies' from the cross-selling of highly complementary portfolios, as well as from providing Altair full access to Siemens's global footprint and global industrial enterprise and customer base. The revenue impact in the mid-term, Siemens projects, could be more than 500 million USD per annum, growing to more than 1.0 billion USD in the long-term. Siemens also aims to achieve cost synergies on a short-term basis, with an EBITDA impact of more than USD 150 million per annum by year two post-closing.
A Siemens press release read:
"The transaction is expected to be EPS (pre-PPA) accretive by year two post-closing. The acquisition will be fully cash-financed from Siemens’ existing resources and its capacity to fully finance the transaction based on Siemens’ strong balance sheet, as underlined by its exceptional rating, which Siemens is committed to maintain.
"Preemptive deleveraging is supported by significant cash proceeds from the already closed Innomotics divestment. In addition, Siemens has substantial financing potential from the sale of shares in listed entities. Closing of the transaction is subject to customary conditions and is expected within the second half of calendar year 2025."
