Altair Engineering in Troy has agreed to be acquired by Germany-based Siemens AG, which has four facilities in metro Detroit, for approximately $10 billion, based on a per-share price of $113.
Altair Engineering is a leading provider of software in the industrial simulation and analysis market.
“This acquisition represents the culmination of nearly 40 years in which Altair has grown from a startup in Detroit to a world-class software and technology company,” says James Scapa, founder and CEO of Altair. “We have added thousands of customers globally in manufacturing, life sciences, energy, and financial services, and built an amazing workforce, and innovative culture.
“We believe this combination of two strongly complementary leaders in the engineering software space brings together Altair’s broad portfolio in simulation, data science, and HPC with Siemens’ strong position in mechanical and EDA design. Siemens’ outstanding technology, strategic customer relationships, and honest, technical culture is an excellent fit for Altair to continue its journey driving innovation with computational intelligence.”
By adding Altair’s simulation portfolio, with its mechanical and electromagnetic capabilities, Siemens says it’s enhancing its “comprehensive Digital Twin” to deliver a full-suite, physics-based, simulation portfolio as part of Siemens Xcelerator.
“Acquiring Altair marks a significant milestone for Siemens,” says Roland Busch, president and CEO of Siemens AG. “This strategic investment aligns with our commitment to accelerate the digital and sustainability transformations of our customers by combining the real and digital worlds.
“The addition of Altair’s capabilities in simulation, high-performance computing, data science, and artificial intelligence together with Siemens Xcelerator will create the world’s most complete AI-powered design and simulation portfolio. It’s a logical next step: we have been building our leadership in industrial software for the last 15 years, most recently, democratizing the benefits of data and AI for entire industries.”
Altair’s data science and AI-powered simulation capabilities are designed to allow anyone, from engineers to generalists, to access simulation expertise to decrease time-to-market and accelerate design iterations. Additionally, Altair’s data science capabilities are expected to unlock Siemens’ industrial domain expertise in product lifecycle and manufacturing processes.
From a purely business perspective, the transaction is expected to increase Siemens’ digital business revenue by 8 percent, adding EUR 600 million to Siemens’ digital business revenue of EUR 7.3 billion as reported in fiscal year 2023.
Siemens says it 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 with a revenue impact of more than $500 million p.a. mid-term growing to more than $1.0 billion p.a. long-term.
Moreover, Siemens says it aims 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.
