Siemens acquires Altair to further strengthen its industrial software and artificial intelligence capabilities

Acquisition of Altair, a global technology company that provides solutions in areas such as high-performance computing and artificial intelligence

Committed to building a complete portfolio of artificial intelligence design and simulation products

Offering Altair shareholders a purchase price of $113 per share, equivalent to a corporate valuation of $10 billion, and a 19% premium to Altair's unaffected closing price on October 21, 2024

Siemens expects to achieve cost and revenue synergies

Expected to be accretive to earnings per share in the second year after the transaction is completed (before purchase price amortization)

Siemens recently announced that it has signed an agreement to acquire Altair, a provider of industrial simulation and analysis software. Under the agreement, Siemens will offer Altair shareholders a purchase price of $113 per share, equivalent to a valuation of Altair of $10 billion. The purchase price is a 19% premium to Altair's closing price on October 21, 2024 (the last trading day before the acquisition). Through this acquisition, Siemens will further consolidate its position as a technology company and maintain its dominant position in the field of industrial software.

The acquisition of Altair is an important milestone for Siemens. This strategic investment confirms our commitment to help customers accelerate digital transformation and achieve sustainable development by integrating the real and digital worlds. Siemens Xcelerator combined with Altair's capabilities in simulation, high-performance computing, data science and artificial intelligence will create a more complete AI design and simulation product portfolio. "Over the past 15 years, we have been continuously consolidating Siemens' leading position in industrial software and accelerating the benefits of data and artificial intelligence to all industries in recent years. This acquisition is an important step for us to move forward firmly."

Ralf P. Thomas, Chief Financial Officer of Siemens AG, said: "The acquisition of Altair will bring good synergies, help Siemens strictly control capital allocation, and balance investment and shareholder returns based on a strong balance sheet. The transaction is expected to be accretive to earnings per share within two years after the transaction is completed."

"This acquisition is an important moment in Altair's nearly 40-year development from a Detroit startup to a world-class software and technology company. “We have thousands of customers in manufacturing, life sciences, energy and financial services around the world, and have built a talented workforce and a culture of innovation,” said James Scapa, founder and CEO of Altair. “We believe our two companies are highly complementary in the engineering software space. This move brings together Altair’s broad portfolio in simulation, data science and high performance computing (HPC) with Siemens’ strength in mechanical design and electronic design automation (EDA). Siemens’ leading-edge technology, strategic customer relationships and integrity-based technology culture are highly aligned with Altair’s, and together we will accelerate technological innovation with computational intelligence.” ”

Altair’s simulation product portfolio has complementary advantages with Siemens in the fields of mechanical and electromagnetic functions, which can help Siemens further enhance digital twin technology and provide users with a full set of physics-based simulation product portfolio through Siemens Xcelerator. With Altair’s data science and artificial intelligence-driven simulation capabilities, both engineers and ordinary employees can more easily obtain simulation expertise, shorten product time to market, and accelerate design iterations. Altair’s data science capabilities will also unlock the value of Siemens’ industrial expertise in product lifecycles and manufacturing processes.

Bring cost synergies and achieve every Share earnings increase

Thanks to this transaction, Siemens' digital business revenue is expected to increase by 8% year-on-year from 7.3 billion euros in 2023, an increase of approximately 600 million euros. The acquisition will also bring significant synergies to Siemens. By cross-marketing the highly complementary product portfolios of both parties and making Altair software fully available to Siemens' global business and global industrial enterprise customer base, it is expected to bring more than $500 million in annual revenue growth in the medium term, and more than $1 billion in revenue growth in the long term. Siemens plans to achieve cost synergies in the short term and achieve an annual EBITDA growth of more than $1 billion in the second year after the completion of the transaction. $150 million.

The transaction is expected to be accretive to earnings per share in the second year after closing (before purchase price amortization). The acquisition will be fully financed by Siemens in cash from its own resources. With a strong balance sheet and excellent market ratings, Siemens has fully demonstrated its ability to fully fund the transaction. Siemens has completed the divestiture of Innomotics, which has generated significant cash proceeds to support the deleveraging of the acquisition in advance. Siemens can also obtain significant financing through the sale of shares in the listed company. The transaction is subject to customary closing conditions and is expected to close in the second half of 2025.

Altair is a global leader in computational science and artificial intelligence, providing software and cloud computing solutions in simulation and analytics, data science and AI, and high-performance computing to help companies in various industries make smart decisions and improve their competitiveness in an increasingly connected world. Founded in 1985 and listed on Nasdaq in 2017, Altair is headquartered in Troy, Michigan, USA. The company has more than 3,500 employees, of which approximately 1,400 are engaged in research and development.