Synopsys to acquire graphics software maker Ansys in $35 billion tech deal

17.01.2024

Semiconductor design and software company Synopsys has revealed its plans to acquire Ansys, a leading engineering and product design software firm, in a significant cash-and-stock transaction valued at around $35 billion. This acquisition stands out as one of the most substantial tech deals announced in recent years.

Under the terms of the agreement, Synopsys will pay approximately $390 per share to Ansys shareholders, comprising $197 per share in cash and roughly one-third of a Synopsys share for each Ansys share. The completion of the deal is anticipated in the first half of 2025, subject to regulatory approvals and approval by shareholders.

Synopsys shares experienced a 3% increase on Tuesday morning, rebounding from a 12% dip since reports emerged in December regarding the advanced talks between the two companies. Ansys shares, on the other hand, witnessed a 5% decline but had risen over 14% during the same period.

Post-merger, Ansys shareholders will possess a 16.5% stake in Synopsys, as mentioned by Synopsys CEO Sassine Ghazi in a conference call following the announcement. The financing structure for the acquisition involves $16 billion in debt financing and the remaining $3 billion in nonequity consideration from Synopsys’ existing cash reserves.

As of October 31, 2023, Synopsys reported cash and cash equivalents of $1.4 billion. Synopsys CFO Shelagh Glaser clarified that the deal is not expected to be immediately accretive, with potential accretion occurring at least a year after the transaction’s closure.

Ghazi expressed optimism about the involvement of Ansys CEO Ajei Gopal in the combined entity, stating, “This is the logical next step for our successful, seven-year partnership with Ansys, and I look forward to working closely with Ajei and the talented Ansys team to realize the benefits of this combination for our customers, shareholders, and employees.”

In recent months, the tech industry has witnessed several notable deals, including Microsoft’s acquisition of Activision Blizzard and Broadcom’s purchase of VMware. Cisco also made headlines with its $28 billion acquisition of Splunk in September, marking the company’s largest-ever deal.

Advisors for Synopsys included Evercore and Cleary Gottlieb Steen & Hamilton, while Qatalyst Partners, Skadden, and Goodwin Procter served as advisors to Ansys in this transformative transaction.