Chip design software maker Synopsys announced on Tuesday its acquisition of Ansys in a cash-and-stock deal valued at an impressive $35 billion. The agreement marks the largest acquisition in the industry since chipmaker Broadcom’s $69 billion takeover of software maker VMware in November of the previous year.
The strategic move positions Synopsys to bolster its presence in the market significantly, expanding its capabilities in chip design and simulation. Ansys, renowned for its software employed in diverse product development, ranging from airplanes to tennis rackets used by athletes like Novak Djokovic, is a formidable player in the simulation software arena.
The deal, which translates to a per-share value of $390.19, represents a substantial premium of approximately 29% over Ansys’ closing stock price on December 21, 2023, as revealed by the companies. The acquisition is expected to be a transformative step for Synopsys, enabling it to enhance its portfolio and meet the growing demands of industries such as aerospace, defense, automotive, and energy.
The transaction comes on the heels of increased economic optimism and a series of unsuccessful attempts by antitrust regulators to impede major deals. The technology sector has been witnessing a surge in large-scale acquisitions, with industry leaders seeking to capitalize on favorable market conditions.
Reuters broke the news on December 22, reporting Synopsys’ negotiations with Ansys. The latter had initiated discussions regarding a potential sale late last year after attracting acquisition interest from design software firm Cadence Design Systems, according to sources familiar with the matter.
The decision to pursue such a transformative acquisition, particularly during a leadership transition, underscores the strong commercial appeal of Ansys’ simulation software. The company’s products are widely utilized by engineers, designers, and researchers across various industries to analyze and optimize products, competing with established offerings like Autodesk’s Fusion 360 and AutoCAD, as well as Dassault Systemes’ Solidworks.
Notably, the acquisition follows closely on the heels of Synopsys’ recent leadership change, with co-founder and Executive Chairman Aart de Geus handing over the chief executive reins to Chief Operating Officer Sassine Ghazi just two weeks ago. This transition signals Synopsys’ commitment to pursuing innovative strategies and expanding its market influence in the highly competitive tech sector. As the deal progresses, it could serve as a harbinger of further major acquisitions within the industry.