Siemens has signed an agreement to acquire software provider Altair Engineering Inc. Siemens CEO Roland Busch said the addition of Altair's capabilities in artificial intelligence, computing, simulation and data science will create a complete AI-powered simulation and design portfolio.
By adding Altair’s simulation portfolio and mechanical and electromagnetic capabilities, Siemens expects to enhance its comprehensive Digital Twin to deliver a full-suite, physics-based, simulation portfolio as part of Siemens Xcelerator.
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Altair's data science and AI-powered simulation capabilities allow users to access simulation expertise to decrease time-to-market and accelerate design iterations. Additionally, Siemens expects Altair's data science capabilities to unlock an industrial domain expertise in product lifecycle and manufacturing processes.
The transaction will increase Siemens' digital business revenue by +8%, adding $652.4 million to Siemens' digital business revenue of $7.9 billion, as reported in fiscal year 2023. Siemens 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 $500 million p.a. mid-term growing to more than $1 billion p.a. long-term.
Moreover, Siemens aims to achieve cost synergies on a short-term basis, with an EBITDA impact of more than $150 million p.a. by year two post-closing.
The transaction is expected to be EPS (pre-PPA) accretive by year two post-closing. The acquisition will be fully cash-financed from Siemens’ existing resources and its capacity to fully finance the transaction based on Siemens’ strong balance sheet, as underlined by its exceptional rating, which Siemens is committed to maintain.
Preemptive deleveraging is supported by significant cash proceeds from the already closed Innomotics divestment. In addition, Siemens has substantial financing potential from the sale of shares in listed entities. Closing of the transaction is subject to customary conditions and is expected within the second half of calendar year 2025.
Altair shareholders will receive $113 per share, representing an enterprise value of approximately $0 billion. 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.
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