Semiconductor design and software giant Synopsys has revealed plans to acquire engineering and product design software firm Ansys in a cash-and-stock deal valued at $35 billion. This acquisition marks one of the largest tech deals in recent years, set to reshape the industry.
Deal Overview
In a significant move, Synopsys will pay approximately $390 per share in a combination of cash and stock, comprising $197 per share in cash and around one-third of a Synopsys share for each Ansys share. The deal is scheduled to close in the first half of 2025, subject to regulatory and shareholder approvals.
Market Impact
Synopsys shares experienced a 3% surge on Tuesday morning following a 12% decline reported by The Wall Street Journal in December during the advanced talks. Ansys shares, while slipping 5%, saw a notable 14% increase in the same period since December.
Shareholder Landscape
Post-merger, Ansys shareholders are expected to hold 16.5% of Synopsys, as disclosed by Synopsys CEO Sassine Ghazi during a conference call. The deal will be financed in part by $16 billion in debt financing, with the remaining $3 billion in non-equity consideration sourced from Synopsys’ cash reserves.
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Financial Snapshot
As of October 31, 2023, Synopsys reported cash and cash equivalents of $1.4 billion. However, the deal is not projected to be immediately accretive, with Synopsys CFO Shelagh Glaser stating that accretion is expected at least a year after the deal concludes.
Leadership Continuity
Ghazi anticipates the continued involvement of Ansys CEO Ajei Gopal post-merger, citing it as the “logical next step” in their seven-year successful partnership. The acquisition is expected to bring significant benefits to customers, shareholders, and employees of both companies.
Industry Trends
The mega deal follows a trend of notable tech acquisitions in recent months, including Microsoft’s acquisition of Activision Blizzard and Broadcom’s purchase of VMware. Cisco also announced a substantial $28 billion acquisition of Splunk in September, marking its largest-ever deal.
Advisory Roles
Advisors for Synopsys included Evercore and Cleary Gottlieb Steen & Hamilton, while Qatalyst Partners, Skadden, and Goodwin Procter advised Ansys on the transaction.
