On Tuesday, semiconductor design and software firm Synopsys revealed its intention to acquire Ansys, an 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 in recent times.
As part of the deal, The company plans to offer approximately $390 per share to Ansys shareholders, consisting of $197 per share in cash and roughly one-third of a Synopsys share for each Ansys share. The completion of the acquisition is anticipated in the first half of 2025, subject to regulatory and shareholder approvals.
Despite a 12% decline in Synopsys shares since The Wall Street Journal reported advanced talks in December, the announcement led to a 3% increase in Synopsys shares on Tuesday morning. Conversely, Ansys shares experienced a 5% drop but had risen more than 14% since December.
Synopsys Merger Details: Post-Merger Ownership and Financing Details Unveiled by Ansys CEO.
After the merger, Ansys shareholders are expected to possess 16.5% of Synopsys, according to statements made by company CEO Sassine Ghazi during a post-announcement conference call. The acquisition will be partially financed through $16 billion in debt financing, with the remaining $3 billion non-equity consideration sourced from Synopsys’ existing cash, as of October 31, 2023, when it reported cash and cash equivalents of $1.4 billion.
Company CFO Shelagh Glaser noted that the deal may not immediately contribute to earnings until at least a year after its closure. Ghazi expressed optimism about the continued involvement of Ansys CEO Ajei Gopal through the combination, highlighting the logical progression of their successful seven-year partnership.
In a broader context, this acquisition adds to a series of noteworthy deals in recent months, including Microsoft’s acquisition of Activision Blizzard, Broadcom’s purchase of VMware, and Cisco’s announcement of its $28 billion acquisition of Splunk in September, marking the company’s largest-ever deal.
The advisory teams for this transaction included Evercore and Cleary Gottlieb Steen & Hamilton for Synopsys, while Qatalyst Partners, Skadden, and Goodwin Procter advised Ansys.