Synopsys to Acquire Graphics Software Maker Ansys | $35 Billion Tech Deal

Paresh Jadhav

11 months ago

Synopsys is set to acquire Ansys, an engineering software provider, in one of the biggest tech deals ever completed – one valued at $35 billion! The combined company will benefit greatly from this combination.

This transaction contains forward-looking statements as defined by federal securities law. For a fuller description of any risks or uncertainties associated with it, please see the proxy statement/prospectus filed with the Securities and Exchange Commission.

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Ansys CEO Ajei Gopal on the deal

Ansys, a Canonsburg-based producer of engineering simulation software, is in discussions to be acquired by semiconductor design company Synopsys for $35 billion through a cash and stock deal – making this transaction one of the biggest tech deals this year if successful.

Gopal joined Ansys in 2017 and helped to open their 36,000-square-foot building at Carnegie Mellon in 2019. In 2019, he also was appointed to its Board of Trustees – which acts as an advisory body tasked with providing support and direction for their institution.

Gopal brings extensive technology and management experience from large software and technology firms. He most recently served as interim President and Chief Operating Officer at digital security firm Symantec, leading them through their acquisition of Blue Coat and recruitment of a permanent CEO. Since 2016, he has also been an operating partner at private equity firm Silver Lake Partners; prior to that he held leadership roles at tech firms Hewlett-Packard and CA Technologies.

Ansys investors on the deal

ANSYS simulation software helps innovators bridge the gap between design and reality. From sustainable transportation, advanced semiconductors, satellite systems and lifesaving medical devices – visionary companies trust ANSYS simulation to push beyond what is possible.

Synopsys stock rose in pre-market trading after it announced the acquisition of Ansys’ engineering and product design software provider Ansys, creating a larger player in chip design software. The purchase will be funded using both cash and shares.

The combined company will realize cost and revenue synergies that will accrete to earnings per share over two years after closing, as well as maintaining investment grade credit ratings.

This transaction is expected to close by the first half of 2025, subject to regulatory and shareholder approval. Synopsys plans on securing debt financing to fund significant portions of its cash component purchase price, and upon closing will change its name to Synopsys.

Ansys financials on the deal

Synopsys shareholders will own 16.5% of the combined company upon completion. Partly funded through $16 billion of debt financing and the remainder covered by cash reserves from Synopsys, this transaction will also bring job creation.

Synopsys expects this acquisition to be immediately accretive to non-GAAP earnings per share and significantly so thereafter, strengthening their position in key growth markets such as aerospace. Simulation can increasingly be used to address complex problems like tracking an orbiting satellite or tennis racket – thus adding value.

The transaction will require shareholder and regulatory approvals as well as customary closing conditions to complete. Evercore serves as financial advisor to Synopsys while Skadden, Arps, Slate, Meagher & Flom LLP acts as legal counsel. Following completion, ANSYS’ management team will remain intact.

Ansys outlook on the deal

This transaction is expected to be significantly accretive to non-GAAP EPS within the second year post-closing and will produce at least $400 million of run-rate cost synergies and over $1 billion of revenue synergies by year three post-closing, growing significantly over time.

Ansys software enables visionary companies to close the gap between design and reality. Engineers use Ansys simulation software to bring their life-changing concepts into market – from sustainable transportation systems and cutting-edge semiconductors, satellite systems and medical devices, all the way through satellite systems and lifesaving medical devices.

Ansys’ ANSYS platform offers a powerful and fully integrated suite of engineering simulation software, such as mechanical FEA, CFD and physics-based modeling and analysis solutions. Their products and services help customers address even their most challenging problems quickly while speeding time-to-market and improving product quality. ANSYS also offers extensive support, training and professional services tailored specifically to customer needs at each step in the design cycle process – they are based in Canonsburg, Pennsylvania.

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