Siemens has recently announced its plan to acquire Altair Engineering, a global leader in computational science and artificial intelligence software, in a deal worth $10 billion. This acquisition is a strategic move by Siemens to strengthen its position as a leading technology company and enhance its leadership in industrial software. The acquisition is expected to be EPS (pre PPA) accretive by year two post closing.
Strategic Investment in Digital Transformation
The acquisition of Altair Engineering is a significant milestone for Siemens, as it aligns with the company's commitment to accelerate the digital and sustainability transformations of its customers. The addition of Altair's capabilities in simulation, high performance computing, data science, and artificial intelligence will create the world's most complete AI powered design and simulation portfolio. This portfolio will enable customers to accelerate their digital and sustainability transformations, making factories more efficient, cities more livable, and transportation more sustainable.
Enhancing Siemens' Digital Business
The acquisition will strongly increase Siemens' digital business revenue by 8%, adding $600 million to Siemens' digital business revenue of $7.3 billion as reported in fiscal year 2023. Siemens expects to achieve significant revenue synergies especially from cross selling of the highly complementary portfolios and from providing Altair full access to Siemens's global footprint and global industrial enterprise and customer base. The revenue impact is expected to be more than $500 million p.a. mid term growing to more than $1.0 billion p.a. long term.
Significant Synergies and Cost Savings
The transaction is expected to achieve cost synergies on a short term basis, with an EBITDA impact of more than $150 million p.a. by year two post closing. Siemens aims to achieve significant cost savings by leveraging the highly complementary nature of the two companies' portfolios and integrating Altair's operations into its existing business. The acquisition will be fully cash financed from Siemens' existing resources, and the company has committed to maintaining its strong balance sheet.
Altair's Innovative Culture and Technology
Altair is a global leader in computational intelligence that provides software and cloud solutions in simulation, high performance computing (HPC), data analytics, and AI. The company's innovative culture and technology have enabled organizations across all industries to compete more effectively and drive smarter decisions in an increasingly connected world. Altair's data science and AI powered simulation capabilities allow anyone, from engineers to generalists, to access simulation expertise to decrease time to market and accelerate design iterations.
Third Quarter Financial Results
Altair has recently announced its third quarter financial results, with software revenue up 16.5% to $138.7 million and total revenue up 13.0% to $151.5 million. The company's net income for the quarter was $1.8 million, an improvement of $6.2 million compared to the same period last year. Non GAAP net income was $21.2 million, an increase of $8.5 million compared to the same period last year.
What's Next for Siemens and Altair?
The acquisition of Altair Engineering by Siemens is expected to close in the second half of calendar year 2025, subject to customary conditions and regulatory approvals. The transaction is expected to be EPS (pre PPA) accretive by year two post closing, and Siemens aims to maintain its strong balance sheet and rating. The acquisition is a significant milestone for Siemens, enhancing its leadership in industrial software and AI, and creating the world's most complete AI powered design and simulation portfolio.
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