Quickie: DS to acquire CST for €220 million

Jul 21, 2016 | Hot Topics

Dassault Systèmes announced its Q2 results this morning (good, acceleration expected in the second half of the year) and also said that it has agreed to acquire acquire Computer Simulation Technology AG (CST), a maker of electromagnetic and electronics simulation, for about €220 million. CST is privately held, but DS says it had revenue of about €45 million in 2015; this gives us a 5xish revenue multiple for the purchase price.

Much more coming on this as I go through the reams of earnings material, but the CST is known for its full spectrum EM simulation. CST says it has more than 2000 customers across the telecommunications, defense, automotive, electronics, and medical equipment markets. CST’s best-known product is arguably CST STUDIO SUITE; its modules include CST MICROWAVE STUDIO (MWS), for the analysis of antennas, filters, couplers, planar and multi-layer structures; CST EM STUDIO for static and low frequency electromagnetic applications; CST PARTICLE STUDIO for the consistent simulation of free moving charged particles; CST CABLE STUDIO for simulating signal integrity — there are a lot more, too, since the company has been creating products since 1992. The main point, however, is that these are integrated into a platform with a common user interface. CST STUDIO SUITE includes both 3D modeling and a schematic layout tool in a shared UI, so the user isn’t moving between apps to complete his design. The pre-processor, solvers and post are all in one environment, which CST says makes the analysis flow much more intuitive.

Bernard Charlès, DS CEO said that the “acquisition of CST is part of our larger, ongoing mission to provide 3DEXPERIENCE universes to explore, accelerate and experience innovation that will achieve a greater harmony between product, nature and life.”

It appears that DS plans to continue to sell CST products as they are, at least for now, but will “integrate CST’s solutions into its existing portfolio of industry solution experiences for simulating structural mechanics, multi-body systems, heat transfer and fluids, to address the growing $600 million EM simulation market. This will offer a new industry standard in multiphysics and multiscale simulation of autonomous cars, connected homes, medical equipment, wearable electronics and other smart objects.”

DS says the transaction will be all cash and that it is expected to be completed in Q4 2016.

More soon.