A quick catch-up on some recent news as we get ready for a bumper crop of earnings this week:

Cadence said it would acquire OpenEye Scientific Software, maker of molecular modeling and simulation software used by pharmaceutical and biotech companies, for about $500 million in cash. Cadence said OpenEye’s solutions are used by pharmaceutical companies globally – 19 of the top 20 in the world, including Pfizer and AstraZeneca – as well as biotechnology companies and academic institutions for drug discovery. Why do this? Because it “accelerates Cadence’s Intelligent System Design strategy and [brings] Cadence’s computational software expertise [in] proven algorithmic, simulation and solver advances to life sciences … Biosimulations are a critical tool for pharmaceutical research as they provide atomic-level insight into molecular interactions, and there’s a growing demand for high-performance simulation of larger biological systems over longer time scales.” My take? This acquisition is in keeping with Cadence’s push into new simulations and new verticals — with this deal, life sciences. Numeca, Pointwise, Future Facilities (a partial list). No longer content to address chip and board markets, Cadence wants to help clients across sectors tie together all of the elements in their products via simulation. I haven’t been briefed on this deal, but I can certainly imagine inventing a drug that requires an inhaler (bio+CFD) or insulin-pump type systems (bio+CFD+electonics+mechanical systems) that combine many different types of analyses. The deal is expected to close in Q3 2022. Cadence reports results later today, and the company may say more on the earnings call. We’ll see, won’t we?

Several of you wrote to me about ESI’s announcement that it had sold off some of its CFD assets. Most of you guessed it was OpenFOAM, but that’s not correct. ESI sold the ACE+ Suite and other assets (VisCART, CFD-GEOM, CFD-View, CADAlyzer, CFD Topo, and CFD FASTRAN) to “a global leader and customer of the group” for €24 million (the products had combined revenue of €4.6 million in FY21, so this is a 5x-ish revenue multiple). Why do this? ESI considered these products to be non-core, and the sale allows it to focus more readily on the products that will contribute to its future growth. It’s part of management’s pruning of the large and often confusing product set. Most of these products were acquired in 2004 when ESI bought the software assets of CFDRC. My take? ESI has made a lot of acquisitions over its 40-odd years, some of which were central to the core and others which … weren’t. Continuing to invest in non-core products diverts resources from what can help ESI grow. Selling these products enhances that focus and contributes resources — a good deal on both counts. And for those who wonder: no, I don’t know who ESI sold these assets to, but I don’t think it will create a new competitor in the market.

Mensch und Maschine Software, one of Autodesk’s biggest European resellers, announced it “unabatedly continued its record chasing in the second quarter, achieving the strongest first half year in the company’s history.” It said, “Growth drivers were the very robust own Software segment and the renewal business in the VAR segment, more than compensating for the still slow growth in new business.” Revenue for the first six months of 2022 was €157 million, up 15% as reported, with €49 million, also up 15% from M+M Software and €108 (yup, up 15%) from the VAR Business. Another positive result that bodes well for Autodesk — which reports in a few weeks.

Finally, I love compelling company names. Schniteger Corp == not awesome. But this? “Hexagon extends presence in German mould and die market with the acquisition of Men at Work” — conjures up a great 80s song and explains EXACTLY what the company does. Enables men to work. (Sexist, though.) Anyway, Men at Work is a reseller of Hexagon’s VISI CAD CAM software in Germany. According to the announcement, “Men at Work has also developed its own modules to improve the useability and productivity of the solution. Founded in 1995, Men at Work employs 20 people and serves more than 600 customers from its location in Bietigheim.” Hexagon didn’t disclose the terms of the deal but said that Men at Work will be consolidated within the Manufacturing Intelligence division. Hexagon also announces results this week.