Germany’s Siemens AG said it agreed to buy Troy, Michigan-based software maker Altair Engineering Inc. for an enterprise value of $10 billion — its largest-ever acquisition.
In a separate deal, Siemens announced it will sell its airport logistics unit Siemens Logistics to Toyota Industries Corporation’s Vanderlande for €300 million.
Siemens said Altair Engineering is “a global leader in computational science and artificial intelligence (AI) that provides software and cloud solutions in Simulation and Analysis, Data Science and AI, and High-Performance Computing …”
Altair shareholders will receive $113 per share in cash, representing an enterprise value of $10 billion.
Siemens said: “The offer price represents a 19% premium to Altair’s unaffected closing price on October 21, 2024, the last trading day prior to media reports regarding a possible transaction.
“With this acquisition Siemens strengthens its position as a leading technology company and its leadership in industrial software.”
Siemens added: “By adding Altair’s highly complementary simulation portfolio, with strength in mechanical and electromagnetic capabilities, we are enhancing our comprehensive Digital Twin to deliver a full-suite, physics-based, simulation portfolio as part of Siemens Xcelerator.
“Altair’s data science and AI-powered simulation capabilities allow anyone, from engineers to generalists, to access simulation expertise to decrease time-to-market and accelerate design iterations.
“Additionally, Altair’s data science capabilities will unlock Siemens’ industrial domain expertise in product lifecycle and manufacturing processes.”
Founded in 1985, Altair went public in 2017 on Nasdaq. Out of its more than 3,500 employees, 1,400 work in R&D.
Siemens said the transaction will increase its digital business revenue by 8%, adding about €600 million to the group’s digital business revenue of €7.3 billion as reported in fiscal year 2023.
It said it expects to achieve significant revenue synergies “especially from cross-selling of the highly complementary portfolios and from providing Altair full access to Siemens’s global footprint and global industrial enterprise and customer base with a revenue impact of more than USD 500 million p.a. mid-term growing to more than USD 1.0 billion p.a. long-term.”
Moreover, Siemens said it aims to achieve cost synergies on a short-term basis “with an EBITDA impact of more than USD 150 million p.a. by year two post-closing.”
Closing of the transaction is subject to customary conditions and is expected within the second half of calendar year 2025.
Siemens CEO Roland Busch said: “Acquiring Altair marks a significant milestone for Siemens. This strategic investment aligns with our commitment to accelerate the digital and sustainability transformations of our customers by combining the real and digital worlds.
“The addition of Altair’s capabilities in simulation, high performance computing, data science, and artificial intelligence together with Siemens Xcelerator will create the world’s most complete AI-powered design and simulation portfolio.”
Siemens CFO Ralf Thomas said: “It is a logical next step: we have been building our leadership in industrial software for the last 15 years, most recently, democratizing the benefits of data and AI for entire industries.
“The acquisition of Altair is highly synergistic, underpinning Siemens’ stringent capital allocation, balancing investments and shareholder returns on the basis of a strong balance sheet. The transaction is expected to be EPS accretive two years post-closing.”
James Scapa, Altair’s founder and CEO, said: “This acquisition represents the culmination of nearly 40 years in which Altair has grown from a startup in Detroit to a world-class software and technology company.
“We have added thousands of customers globally in manufacturing, life sciences, energy and financial services, and built an amazing workforce, and innovative culture.
“We believe this combination of two strongly complementary leaders in the engineering software space brings together Altair’s broad portfolio in simulation, data science, and HPC with Siemens’ strong position in mechanical and EDA design.
“Siemens’ outstanding technology, strategic customer relationships, and honest, technical culture is an excellent fit for Altair to continue its journey driving innovation with computational intelligence.”