“Synopsys to Acquire Ansys, Creating a Leader in Silicon to Systems Design Solutions”

Jan 16, 2024 | Hot Topics

Well … now we know. Synopsys announced that it plans to acquire Ansys. Deal details below, but look at their headline (press release here), pasted as the title of this post. I’m sure that’s the intent behind the deal: to create a more comprehensive EDA solution; but what about the 70-ish% of Ansys that isn’t EDA? I’m a fan of Fluent and Discovery and and and … we shall have to see, won’t we. As I wrote yesterday, it would be foolish if an acquirer pays this much for Ansys only to destabilize its very profitable business.

Anyway, deal details:

Synopsys will acquire Ansys by paying shareholders $197.00 in cash and transferring 0.3450 shares of Synopsys common stock for each Ansys share. A bit of math shows that this is roughly $390 per share in total. That’s a premium of 29% on Ansys’ closing share price as of 21 December, when the news first started percolating that there might be a deal in the offing and values the deal at $35 billion. When the deal concludes, Ansys shareholders would own about 17% of the combined company.

Sassine Ghazi, CEO of Synopsys, said, “The megatrends of AI, silicon proliferation and software-defined systems are requiring more compute performance and efficiency in the face of growing, systemic complexity. Bringing together Synopsys’ industry-leading EDA solutions with Ansys’ world-class simulation and analysis capabilities will enable us to deliver a holistic, powerful and seamlessly integrated silicon to systems approach to innovation to help maximize the capabilities of technology R&D teams across a broad range of industries. This is the logical next step for our successful, seven-year partnership with Ansys and I look forward to working closely with Ajei and the talented Ansys team to realize the benefits of this combination for our customers, shareholders and employees.”

Ajei Gopal, CEO of Ansys, adds, “For more than 50 years, Ansys has enabled customers to design, develop and deliver cutting-edge products that are limited only by imagination. By joining forces with Synopsys, we will amplify our joint efforts to drive new levels of customer innovation. This transformative combination brings together each company’s highly complementary capabilities to meet the evolving needs of today’s engineers and give them unprecedented insight into the performance of their products. Ansys has a strong foundation, as demonstrated by preliminary annual contract value (“ACV”) results for Q4 that are expected to exceed the high end of our guidance, and I am confident that building on our partnership with Synopsys will position us well to deliver even greater value for our customers, partners and shareholders. The combined company will accelerate the development of our joint portfolio and deliver an increased level of innovation, which will benefit Ansys’ traditional customers. I am proud of all that our employees do every day to make Ansys and our customers successful and look forward to the combined company achieving even greater heights in this next chapter.”

Further, the companies add, “Combining Synopsys’ EDA technology with Ansys’ established simulation and analysis capabilities can provide customers a comprehensive, powerful and system-focused approach to innovation. All Ansys customers, including those outside of the semiconductor industry, can benefit from access to a comprehensive portfolio of products and technologies that will drive innovation … Synopsys and Ansys have had a successful and growing partnership since 2017, and share a culture built on integrity, execution excellence and empowering customers. Combining their highly complementary solutions is expected to provide customers with a broader, deeply integrated suite of software tools to solve their most difficult design challenges while also gaining valuable insights through model-based analysis of complex systems.”

Synopsys said it will fund the $19 billion in cash payments to Ansys shareholders via its cash on hand and $16 billion of debt financing.

This is going to take a while: Synopsys and Ansys expect the deal to close in the first half of 2025, since it needs approval by Ansys shareholders as well as regulatory approvals.

Lots more to come on this …