Just now, Siemens announced that it has signed an agreement to acquire Altair Engineering Inc., a leading provider of industrial simulation and analytics software.
According to the agreement, Altair shareholders will receive an offer of $113 per share, which values the company at approximately $10 billion (actually $10.6 billion).
The announcement also stated that this offer is 19% higher than Altair’s unaffected closing price on October 21, 2024, which was the last trading day before media reports of a potential deal.
Through this acquisition, Siemens strengthens its position as a leading technology company and its leadership in the industrial software sector.
Altair’s simulation software helps predict how products will operate in the real world, aligning with Siemens’ strategy of combining hardware and software to bridge the physical and digital worlds.
In recent years, this German software giant has been attempting to expand its business beyond traditional industrial clients by enhancing its digital offerings, and this single transaction will help them achieve that goal.
Siemens President and CEO Roland Busch stated, “Acquiring Altair is a significant milestone for Siemens. This strategic investment aligns with our commitment to accelerate our customers’ digital and sustainable transformation by integrating the physical and digital worlds. The combination of Altair’s capabilities in simulation, high-performance computing, data science, and AI with Siemens Xcelerator will create the most comprehensive AI design and simulation product portfolio in the world.”
“This is a logical next step: for the past 15 years, we have been establishing our leadership in the industrial software sector, and recently, we’ve been making the benefits of data and AI accessible across the industry.” Siemens CFO Ralf P. Thomas noted that the acquisition of Altair has high synergy potential, supporting Siemens’ stringent capital allocation while balancing investments and shareholder returns based on a strong balance sheet. The transaction is expected to result in earnings per share accretion within two years post-closing.
James Scapa, Founder and CEO of Altair, stated, “This acquisition is a testament to Altair’s nearly 40-year journey from a startup in Detroit to a world-class software and technology company. We have added thousands of customers across global manufacturing, life sciences, energy, and financial services and built an exceptional workforce and innovative culture.” He added, “We believe the combination of two complementary leaders in the engineering software space will integrate Altair’s extensive product offerings in simulation, data science, and HPC with Siemens’ strong position in mechanical and EDA design. Siemens’ outstanding technology, strategic customer relationships, and authentic tech culture are a perfect fit for Altair to continue driving computational intelligence innovation.”
By adding Altair’s highly complementary simulation product portfolio (which features mechanical and electromagnetic advantages), we are enhancing our comprehensive digital twin to offer a complete set of physics-based simulation products as part of Siemens Xcelerator. Altair’s data science and AI-driven simulation capabilities allow anyone—from engineers to generalists—to access simulation expertise, reducing time-to-market and accelerating design iterations. Additionally, Altair’s data science capabilities will unlock Siemens’ industrial expertise in product lifecycle and manufacturing processes.
Significant Synergies and Earnings Accretion
This transaction will significantly boost Siemens’ digital business revenue by over 8%, adding approximately €600 million to Siemens’ reported digital business revenue of €7.3 billion for FY 2023. Siemens anticipates substantial revenue synergies, particularly through cross-selling highly complementary product portfolios and granting Altair full access to Siemens’ global business footprint and industrial customer base, with mid-term revenue impact exceeding $500 million annually and long-term impact exceeding $1 billion annually. Furthermore, Siemens plans to achieve cost synergies shortly, with EBITDA impact in excess of $150 million annually in the second year post-closing.
Earnings per share (pre-acquisition agreement) accretion is expected to materialize in the second year following the completion of the transaction. The acquisition will be fully financed in cash from Siemens’ existing resources, with Siemens capable of fully funding the transaction based on its strong balance sheet, maintaining its excellent rating, highlighting Siemens’ full financing capacity for this deal. Proactive deleveraging is supported by substantial cash proceeds from the completed Innomotics asset divestiture. Additionally, Siemens has significant financing potential from the sale of shares in publicly listed entities. The completion of the transaction is subject to customary conditions and is expected to close in the second half of 2025.
Altair Engineering is a global leader in computational science and artificial intelligence (AI), providing software and cloud solutions in simulation and analytics, data science and AI, and high-performance computing, enabling organizations across various industries to compete more effectively and make informed decisions in an increasingly interconnected world. Altair Engineering Inc. was founded in 1985 and went public in 2017 (NASDAQ), headquartered in Troy, Michigan, USA. Of its more than 3,500 employees, approximately 1,400 are engaged in R&D.