Siemens has recently announced an agreement to acquire Altair, a global provider of high-performance computing and artificial intelligence solutions. This acquisition aims to create a comprehensive product portfolio for AI-driven design and simulation.
Key Details of the Acquisition:
- Acquisition Price: Siemens will offer Altair shareholders $113 per share, valuing the company at approximately $10 billion. This represents a 19% premium over Altair’s closing price on October 21, 2024, prior to the announcement.
- Synergies: Siemens expects to achieve cost and revenue synergies from the acquisition.
- Earnings Growth: The company anticipates an increase in earnings per share (before acquisition price allocation) in the second year following the completion of the transaction.
Siemens has positioned this acquisition as a significant milestone. According to Roland Busch, President and CEO of Siemens AG, “The acquisition of Altair underscores our commitment to helping customers accelerate their digital transformation and achieve sustainability by merging the physical and digital worlds. Siemens Xcelerator, combined with Altair’s capabilities in simulation, high-performance computing, data science, and AI, will create a more comprehensive portfolio of AI design and simulation products.”
Ralf P. Thomas, CFO of Siemens AG, emphasized the positive synergies from the acquisition, aiding Siemens in maintaining strict capital allocation while balancing investment and shareholder returns based on a strong balance sheet. The transaction is expected to enhance earnings per share within two years post-completion.
James Scapa, Founder and CEO of Altair, noted that this acquisition marks a pivotal moment in Altair’s journey from a Detroit startup to a world-class software and technology company. “We believe that there is a strong complementarity between our engineering software capabilities and Siemens’ strengths in mechanical design and electronic design automation (EDA). This merger allows us to combine Altair’s extensive product offerings in simulation, data science, and high-performance computing with Siemens’ advanced technologies and strategic customer relationships.”
Altair’s simulation products in mechanical and electromagnetic domains complement Siemens’ offerings, further enhancing digital twin technologies and providing a comprehensive suite of physics-based simulation products through Siemens Xcelerator. Altair’s AI-driven simulation capabilities will enable both engineers and general employees to access simulation expertise more easily, reducing time to market and accelerating design iterations.
Financial Implications:
The acquisition is expected to boost Siemens’ digital business revenue, projected to grow by 8% year-on-year to €7.3 billion in 2023, adding approximately €600 million. Significant synergies are anticipated through cross-marketing complementary product offerings and opening Altair software to Siemens’ global business and industrial client base, expected to generate over $500 million in additional revenue annually in the medium term, and more than $1 billion in the long term.
Siemens plans to achieve cost synergies in the short term and aims for an EBITDA growth exceeding $150 million annually by the second year post-transaction. The acquisition will be fully financed through Siemens’ existing resources, backed by a strong balance sheet and market rating. The transaction is expected to close in the second half of 2025, pending customary closing conditions.
Founded in 1985 and listed on NASDAQ in 2017, Altair is renowned in the fields of computational science and AI, providing software and cloud solutions for simulation and analysis, data science and AI, and high-performance computing, helping companies across various industries make informed decisions and enhance their competitiveness. The company is headquartered in Troy, Michigan, and employs over 3,500 people, including approximately 1,400 in R&D.