Synopsys Strikes $35 Billion Deal to Buy Ansys
Synopsys, a key Silicon Valley supplier to the chip industry, said on Tuesday that it had agreed to pay $35 billion for Ansys, a Pennsylvania company that makes software used to simulate and analyze product designs for electronics manufacturers, car makers, defense contractors and others.
The deal, which was struck for a combination of cash and stock, follows a $14 billion deal this month by Hewlett Packard Enterprise to buy Juniper Networks, uniting a big computer maker with a specialist in networking gear. It was the latest sign of changing times in the technology sector, which is experiencing slow sales for many types of hardware and a frenzy over artificial intelligence.
A.I. has prompted heavy spending in data centers and has also led many giant internet companies to start designing their own chips. Some carmakers, which have become a major new source of chip demand amid pressures to electrify more vehicles and add driver-assistance features, are also designing their own chips.
Synopsys is a pioneer in software that simulates and verifies chip designs, gradually adding products to help design more complete electronic systems. It has worked with Ansys since 2017 to win more customers for such tasks.
Sassine Ghazi, the chief executive of Synopsys, said the desire to buy Ansys was prompted by the need to move even faster to deliver software that can simulate the electrical and physical interactions of multiple components in systems.
“The worlds of semiconductor design and physical simulation and analysis must come together,” he said in a conference call with analysts.
Mr. Ghazi assumed his title at the beginning of this year from Aart de Geus, who co-founded Synopsys in 1986 and remains executive chairman.
His company’s closest rival for decades has been Cadence Design Systems, another Silicon Valley company. The Wall Street Journal earlier reported talks between Synopsys and Ansys and said interest from Cadence in Ansys had helped put that company in play to be acquired.
A Cadence spokesman declined to comment.
Ansys was formed in 1970 by John Swanson, a mechanical engineer who developed software in the 1960s for Westinghouse to help analyze stresses on nuclear reactors.
The company added other products over the years and became a major player in engineering software. Ajei Gopal, its chief executive since 2017, was formerly an operating partner at Silver Lake, a private equity firm.
Synopsys said the payment to Ansys shareholders had an implied value of $390.19 a share, based on Synopsys’ share price on Dec. 21, the day before The Journal reported deal talks. That price represents a 35 percent premium to the average price of Ansys shares on the 60 days up to that date, Synopsys said.
Some Synopsys shareholders opposed the deal, analysts said, in part because Ansys had recently posted a slower revenue growth rate than Synopsys. But Synopsys predicted the combination would accelerate revenue growth and swiftly begin contributing to higher earnings.
The companies predicted the deal would close in the first half of 2025.
