Synopsys, a leading provider of electronic design automation (EDA) solutions, has announced its plans to acquire Ansys, a company specializing in simulation and analysis tools. This acquisition will create a powerful research and development (R&D) powerhouse in the field of artificial intelligence (AI) and software-defined systems.
Under the terms of the deal, Ansys shareholders will receive $197 in cash and 0.345 share of Synopsys common stock for each Ansys share they hold. This results in an enterprise value of approximately $35 billion. The offer represents a 35% premium over Ansys’ 60-day average price for the period ending December 21, 2023.
Synopsys intends to finance $19 billion of the acquisition with its available cash and a debt offering of $16 billion. The combined company’s total addressable market (TAM) is projected to increase by 1.5 times to around $28 billion.
The collaboration between Synopsys and Ansys has spanned seven years, combining Synopsys’s expertise in semiconductor EDA with Ansys’ simulation and analysis tools. Just weeks ago, The Wall Street Journal reported that the two companies were in talks regarding a possible merger.
The CEO of Synopsys, Sassine Ghazi, expressed the company’s desire to leverage the megatrends of AI, silicon proliferation, and software-defined systems through this acquisition. Synopsys aims to establish itself as a dominant player in R&D across various industries.
The market has responded positively to the news, with Synopsys shares initially rising by 4.6% before slightly retracting, ultimately trading 1.5% higher in the late afternoon. Conversely, Ansys stock fell by approximately 5%.
The deal is expected to generate significant cost savings, with projected run-rate savings of $400 million within three years. Synopsys also anticipates rapid de-leveraging, reducing its debt to less than two times within two years.
With this acquisition, Synopsys solidifies its position in the market as a leading provider of EDA solutions, combining its strengths with Ansys’ simulation and analysis tools. Together, the companies will be able to offer a comprehensive suite of solutions for AI and software-defined systems.
As the R&D powerhouse, Synopsys envisions tapping into the immense potential of AI and cutting-edge technologies, further fueling innovation and advancements in a wide range of industries. The deal is set to reshape the landscape of the R&D sector and drive future developments in AI and software-defined systems.
