Siemens Completes Acquisition of Altair Engineering Inc.

Siemens announced today that it has completed the acquisition of Altair Engineering Inc., a leading provider of software in the industrial simulation and analysis market, for an enterprise value of approximately USD 10 billion.

Siemens announced the Altair acquisition in November last year.

With this acquisition, Siemens extends its leadership in simulation and industrial artificial intelligence (AI) by adding new capabilities in mechanical and electromagnetic simulation, high-performance computing (HPC), data science and AI. The addition of the Altair team and technology to Siemens will further enhance the most comprehensive Digital Twin and make simulation more accessible, so companies of any size can bring complex products to market faster.

“We welcome the Altair community of customers, partners and colleagues to Siemens. Adding Altair’s groundbreaking innovations to the Siemens Xcelerator platform will create the world's most complete AI-powered design, engineering and simulation portfolio. Together, we will help our customers to innovate at the scale and speed that today's complexity-driven world demands,” said Roland Busch, President and CEO of Siemens AG. “Through the ONE Tech Company program, we will extend our leadership in industrial software. This enables all industries to benefit from the revolution driven by data and AI.”

Integrating Altair’s capabilities in the areas of simulation, HPC, data science, and AI enhances the ability of Siemens to drive more efficient and sustainable products and processes. Now, all Siemens customers, from engineers to generalists, will have access to new simulation expertise, can optimize their high-performance computing processes, create new AI tools and perform data analytics to help accelerate innovation and digital transformation for companies of all sizes.

The acquisition of Altair is part of Siemens’ ONE Tech Company program and will meaningfully increase Siemens’ digital revenue share. This growth program enables Siemens to further expand its strong market position and reach the next level of performance and value creation. Through acquisitions like this, as well as R&D investments into areas including software, AI-enabled products, connected hardware and sustainability, Siemens is clearly prioritizing capital allocation to strategic growth fields.

With the completion of the acquisition of Altair as well as the recent expansions of Siemens’ factories in California and Texas, Siemens has now invested over USD 100 billion into the United States in the past 20 years.

Siemens Announces $10.6 Bn Acquisition of Altair

Siemens has announced a $10.6 billion deal to acquire Altair Engineering, a leading provider of engineering software. This acquisition is aimed at boosting Siemens' presence in the industrial software market, particularly in areas like simulation, data science, high-performance computing, and artificial intelligence.

The offer price of $113 per share represents a premium of about 18.7% to Altair's closing price on October 21, 2024. This deal is expected to close in the second half of 2025, following regulatory approvals and other customary closing conditions.

This acquisition aligns with Siemens' strategy to enhance its digital and sustainability transformations by combining the real and digital worlds. It's expected to create the world's most complete AI-powered design and simulation portfolio.

It is to be noted that upon completion of the acquisition, Altair’s common stock (Nasdaq: ALTR) will no longer be listed on any public stock exchange.

Further, the acquisition is expected to significantly strengthen Siemens' position in the industrial software market. Altair's expertise in simulation, data science, high-performance computing, and artificial intelligence complements Siemens' existing capabilities.

The industrial software market, currently valued at $21.5 billion, is expected to grow at an annual rate of 16.7%. Siemens aims to capture a larger share of this growing market through this acquisition.

“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. We have added thousands of customers globally in manufacturing, life sciences, energy and financial services, and built an amazing workforce, and innovative culture,” said James Scapa, Altair’s founder and CEO. “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.”

Besides Altair, Siemens, via it's spinoff Siemens Healthineers, acquired medical device maker Varian Medical Systems, in 2020, for $16.4 billion, aimed at expanding Siemens Healthineers' capabilities in cancer care. Siemens also acquired Flender, a provider of mechanical drive systems, for €900 million in 2020. This acquisition aimed to expand Siemens' capabilities in the energy and automation sectors.

In other notable industrial software acquisitions, Broadcom announced its plan to acquire VMware for whopping $61 billion, in 2023. This deal aims to create a leading infrastructure technology. Cisco acquired Splunk for $28 billion in the same year 2023, enhancing its capabilities in data and security analytics.

IBM acquired Octo Consulting Group for $1.3 billion in 2022, expanding its government IT modernization services.

These acquisitions reflect the ongoing consolidation and growth in the industrial software market, driven by the increasing demand for advanced technologies like AI, data analytics, and cybersecurity solutions.

Siemens AG May Acquire Altair Engineering in Its Biggest Ever Acquisition

Siemens AG is reportedly considering acquiring Altair Engineering Inc., a leading provider of engineering software. This potential acquisition, valued at approximately $9.1 billion, would be one of Siemens' largest to date. Altair is known for its software solutions used in industries such as aerospace, automotive, energy, and financial services.

Siemens' CEO, Roland Busch, has been steering the company towards higher-margin, software-driven product lines, making this acquisition a strategic fit. The move aligns with Siemens' goal to enhance its capabilities in providing comprehensive engineering solutions and to catch up with competitors like Rockwell Automation and Schneider Electric.

While Siemens is actively exploring the acquisition of Altair Engineering Inc., there are reports indicating that other potential bidders could also emerge for Altair. Both Siemens and Altair have declined to comment on the matter, and discussions are still ongoing.

While discussions are ongoing, there's no guarantee that Siemens will ultimately decide to proceed with the acquisition.

Siemens AG's most recent major acquisition was the purchase of Varian Medical Systems in August 2020. Siemens Healthineers, a subsidiary of Siemens AG, acquired Varian for approximately $16.4 billion. This acquisition aimed to strengthen Siemens' position in the medical technology and cancer care market.

Altair reported strong financial results for the third quarter of 2023, with software product revenue increasing by over 14% year-over-year.

Last month, Altair itself made an acquisition with KSK Analytics, to expand its AI reach in Japan and the Asia Pacific region.

It was in last week when Indianweb2.com reported that Altair Engineering is currently exploring a potential sale. The company, which has a market value of nearly $9 billion, has received acquisition interest and is working with investment bankers to gauge interest from potential bidders.

USD 9Bn Worth Software Firm Altair is Looking to Get Acquired

Altair Engineering, a prominent engineering software firm based in Troy, Michigan, is currently exploring a potential sale. The company, which has a market value of nearly $9 billion, has received acquisition interest and is working with investment bankers to gauge interest from potential suitors.

Some of the potential bidders include rival design software makers such as PTC and Cadence Design Systems. Altair's shares surged by over 14% following the news of the potential sale.

Founded in 1985, Altair provides a range of software solutions, including computer-aided engineering software that helps engineers design, analyze, and manufacture products. The company's founder, James Scapa, who also serves as the chairman and CEO, controls a significant portion of the voting stock.

Altair Engineering is exploring a potential sale primarily due to acquisition interest from several potential bidders. The company's strong market position, recent revenue growth, and attractive valuation have made it an appealing target for acquisition.

If the reported sales talks are successful, a deal could be signed in coming weeks, however a acquisition or sale transaction is not guaranteed and Altair may choose to stay independent.

Additionally, Altair's founder and CEO, James Scapa, controls a significant portion of the voting stock, which could facilitate the sale process.

The ongoing consolidation in the engineering software industry, driven by the need for advanced technologies and market expansion, is making Engineering Software Companies an attractive acquisition targets as investors bet on companies that could benefit from the boom in Artificial Intelligence (AI).

This year in January, chip-design company Synopsys agreed to buy design software firm Ansys in a deal worth about $35 billion. Later in Accenture has acquired Excelmax Technologies, a semiconductor design services provider based in Bengaluru, India.

Founded in 1985 by James R. Scapa, George Christ, and Mark Kistner in Troy, Michigan, Altair Engineering initially started as an engineering consulting firm. Over the years, it branched out into product development and computer-aided engineering (CAE) software. Some of its early software products, like HyperWorks, OptiStruct, and HyperMesh, became widely used in the automotive industry.

The latest version of HyperWorks 2023 includes exciting updates to physicsAI, which streamlines the process of training machine learning models from historical data.

In its most recent quarterly earnings report, Altair posted an 8% rise in software revenue to $135.4 million.