Siemens has agreed to acquire simulation software company Altair for $10.6 billion in an all-cash transaction, marking a significant consolidation in the engineering software sector. The German conglomerate will pay $113 in cash per share of Altair, valuing the Michigan-based company at $10.6 billion. Altair provides data analytics technology and services to major corporate clients in various industries such as industrial manufacturing, consumer goods, and energy.
This deal, which is Siemens’ third-largest acquisition to date, is seen as the final step in the consolidation of the engineering software industry following Synopsys’ $35 billion acquisition of Ansys earlier this year. Siemens’ President and CEO, Roland Busch, described the acquisition as a logical progression in the company’s strategy to strengthen its position in industrial software over the past 15 years.
To finance the deal, Siemens is considering selling its shares in other entities. Analysts speculate that Siemens may divest its stake in Siemens Healthineers, a business it previously spun out as part of its focus on technology. The deal is expected to close in 2025 and represents a 19% premium to Altair’s last unaffected closing price. Altair’s shares have seen a 29% increase in the past year, outperforming the S&P 500’s 22% gain.
Despite the seemingly high acquisition cost, analysts believe that the acquisition makes sense as it would position Siemens as a leading player in the simulation market. The purchase of Altair is set to be the second-largest software sector deal this year, as software mergers have been relatively subdued compared to the boom seen in 2021 and 2022, with $369 billion worth of software deals recorded so far this year.
Citi and JPMorgan served as financial advisers to Altair, while Davis Polk and Lowenstein Sandler provided legal counsel for the deal.