Siemens to acquire Altair Engineering for USD $10 billion
Siemens has agreed to acquire Altair Engineering, a software company in the industrial simulation and analysis sector, for an enterprise value of approximately USD $10 billion.
Under the terms of the acquisition, Altair shareholders will receive USD $113 per share, which marks a 19% premium over Altair's closing price on 21 October 2024, before any public speculation about the deal. This move is set to enhance Siemens' standing in the industrial software landscape.
Roland Busch, President and CEO of Siemens, stated, "Acquiring Altair marks a significant milestone for Siemens. 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."
Ralf P. Thomas, Chief Financial Officer of Siemens, added, "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."
Altair's founder and CEO, James Scapa, said, "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."
This acquisition is expected to significantly bolster Siemens' digital business revenue, adding approximately EUR €600 million to the reported digital business revenue of EUR €7.3 billion for the fiscal year 2023. Siemens plans to leverage Altair's global competencies to create revenue synergies, expecting an impact of over USD $500 million in the mid-term, potentially increasing to over USD $1.0 billion in the long term.
Siemens anticipates achieving cost synergies in the short term, targeting an EBITDA impact of over USD $150 million two years after the transaction's completion. The deal is fully cash-financed, drawing on Siemens' existing resources and strong balance sheet, which are additionally supported by proceeds from prior divestments.
The acquisition will be subject to customary close conditions and is anticipated to conclude in the second half of 2025. After completion, Siemens aims to use Altair's simulation and AI-powered capabilities to further enhance its Digital Twin offering and improve product lifecycle management and manufacturing processes.
