Synopsys to sell optical assets to Keysight (maybe)

Last night, Synopsys announced that it has agreed to sell its Optical Solutions Group (OSG) to Keysight Technologies. You may recall that Synopsys is in the process of seeking approval to acquire Ansys and that Keysight last year acquired ESI Group … Anyway, Synopsys hopes this move will ease some of the concerns regulators may have over consolidation among optical design tools providers since OSG tools have some overlap with Ansys’. 

So what’s in it for Keysight? OSG includes CODE V, LightTools, LucidShape, RSoft Photonic Device Tools, and ImSym (and maybe others, but these are the main brands). These software solutions are used in optical systems design, analysis, and simulation. Since Keysight already offers radio frequency and microwave electronic design automation, among other solutions, adding OSG’s tool set will allow it offer more comprehensive multiphysics design solutions. Niels Faché, VP of Keysight’s Design Engineering Software, said “Given the increasing complexity of electronics design, Keysight is excited to expand its software simulation portfolio … This acquisition will give us the capabilities to enable high-performance system use cases beyond electronics, including optics and photonics.”

The companies gave no details about the transaction. Still, we know from Synopsys’ regulatory filings about the Ansys acquisition that “[it proposes] to divest businesses, product lines or assets representing up to $200 million of fiscal year 2023 revenue” so it’s at most that much in revenue moving between the companies but we don’t have any info on price multiples.

What’s weird about this is that the move of OSG to Keysight is subject to regulatory approvals and other conditions for that deal and for Synopsys closing the Ansys deal. It makes sense from Synopsys’ perspective (why get rid of OSG if the Ansys duplication doesn’t occur?), but Keysight would be left with nothing if a deal it has no control over doesn’t happen — I presume there’s a deal breakup fee, but we don’t know.

There was no news otherwise, so it appears that Synopsys’ acquisition of Ansys is still on track to close in early 2025 and I would imagine the OSG deal would close at some time around or before that.