Key Takeaways
- Cadence Design Systems said Tuesday it will acquire BETA CAE Systems International AG for $1.24 billion in cash and stock.
- The deal will help give Cadence access to BETA CAE’s simulation and analysis software.
- BETA CAE’s simulations and analysis software is used by a number of companies including General Motors, Honda, and Lockheed Martin.
Cadence Design Systems (CDNS) said Tuesday it will acquire BETA CAE Systems for $1.24 billion in cash and stock.
The deal will give Cadence access to BETA CAE’s industry leading simulation software, which is used to analyze designs of cars and jets, the companies said in a release.
BETA CAE’s products are used by a number of companies including Honda (HMC), General Motors (GM), and Lockheed Martin (LMT), along with several Formula 1 racing teams.
Cadence said that 60% of the acquisition will be paid for in cash, with the remaining 40% paid with Cadence stock distributed to current BETA CAE shareholders. Cadence is planning to take on debt to fund part of the acquisition, but said it will be paid down “rapidly” by the company’s existing operations.
“Combining our computational software expertise with BETA CAE’s rich technology and talent will enable us to offer a more comprehensive portfolio to customers, while opening significant new opportunities for Cadence by tapping into the structural analysis segment,” Cadence President and CEO Dr. Anirudh Devgan said in a statement.
The acquisition is expected to be completed in the second quarter of 2024, and Cadence estimates that BETA CAE will add about $40 million to the company’s overall revenue this year.
Cadence shares were 3.3% lower at $306.98 as of about 12:25 p.m. ET Tuesday, but were still up more than 16% for the year so far.