Siemens makes $5 billion life sciences R&D acquisition

Never boring. The ink is barely dry on the paperwork that finally closed the Altair deal, and today, Siemens announced that it will acquire Dotmatics, a leader in life sciences R&D software, for $5.1 billion.

Siemens says Dotmatics “offers a market leading platform with a highly profitable portfolio of scientific applications and multi-modal data management for Life Sciences R&D … [that] accelerates customers’ innovation, delivering next generation collaboration and contextualized data to enable AI-powered multi-modal drug development.”

According to Dotmatics, its GraphPad Prism, SnapGene and Geneious, drive efficiency and accelerate innovation by connecting science, data, and decision-making. They say “more than 2 million scientists and over 14,000 customers” use its technology in over 180 countries and that it has a team of 800 people in 14 offices, with R&D teams around the world.

Siemens CEO Roland Busch said, “By acquiring Dotmatics, we’re strategically strengthening our position in Life Sciences and creating a world-leading AI-powered PLM software portfolio as part of Siemens Xcelerator. Artificial Intelligence has emerged as a transformative force across various industries, and its application in Life Sciences is becoming increasingly important. The Dotmatics acquisition is part of our ONE Tech Company growth program, enhancing our leading position in industrial software and helping our customers to innovate even faster.”

[Remember how that ONE Tech phrase was used in the “we closed Altair” press release, almost to tease this one?]

Insight Partners currently owns Dotmatics, and Thomas Swalla, the CEO of Dotmatics, said in the Siemens release that Insight helped Dotmatics achieve “remarkable growth and portfolio expansion.” Even so, “Combining our next-generation scientific intelligence platform and industry-leading scientific applications together with Siemens’ Digital Twin and AI capabilities, we’ll drive a new wave of innovation in life sciences R&D. Together, we’ll accelerate innovation cycles for our customers and help scientists make breakthrough discoveries faster than ever before shaping the future of scientific innovation.”

Details: Siemens says that Dotmatics should “generate more than $300 million revenue in fiscal year 2025 and is highly profitable and cash generative with an adjusted EBITDA margin of above 40 percent. The company’s mid-teens revenue growth and high profitability will be immediately accretive to Siemens’ growth, EBITDA margins and free cash flow, prior to any synergies. Siemens expects substantial revenue synergies: Medium-term revenue synergies expected of around $100 million per year accelerating to over $500 million per year in the long-term.”

Finally, Siemens plans to fund the acquisition “primarily through the sale of shares in listed companies, including Siemens Healthineers,” according to Mr. Busch. The acquisition is expected to close in the first half of fiscal 2026, subject to customary closing conditions and applicable regulatory approvals. [Remember that Siemens’ fiscal year ends on September 30, so this is late 2025/early 2026.]

So, what does this mean? That big companies continue to get bigger and more diverse, obviously. That the definition of digital twin just got bigger, too, to include AI-based drug discovery. And that Siemens has plenty of “corridor” to afford these deals — and seems poised to make more of them. What I don’t think this means is also important: Siemens doesn’t veer; they have always remained constant in their support for legacy industries like auto, aero and machinery — I don’t expect them to be distracted by this potential shiny new part of the portfolio.