BETA CAE’s world-renowned solutions will
complement and expand Cadence’s system analysis portfolio for
automotive, aerospace, industrial and healthcare verticals
Cadence Design Systems, Inc. (Nasdaq: CDNS) today announced it
has entered into a definitive agreement to acquire BETA CAE Systems
International AG, a leading system analysis platform provider of
multi-domain, engineering simulation solutions. The addition of
BETA CAE’s proven technologies and talent will accelerate Cadence’s
Intelligent System Design™ strategy by expanding its multiphysics
system analysis portfolio and enabling entry into the structural
analysis segment, unlocking a multi-billion-dollar incremental TAM
opportunity. Under the terms of the definitive agreement, Cadence
will pay approximately $1.24 billion for the transaction, with 60
percent of the consideration to be paid in cash and 40 percent to
be paid through the issuance of Cadence common stock to current
BETA CAE shareholders. In conjunction with the transaction, Cadence
expects to obtain new debt financing to fund a portion of the cash
component of the purchase price. Cadence plans to use free cash
flow generated by its existing operations to rapidly pay down debt
incurred to fund the transaction, while also maintaining share
repurchases.
Increasing system complexity and time-to-market pressures from
accelerating mechanical and electrical hyperconvergence, along with
the digital transformation in multiple industries, are driving the
need for multiphysics simulations early in the design cycle. Over
the past few years, Cadence has expanded its system analysis
portfolio to build out a comprehensive multiphysics platform
including electromagnetics (EM), electrothermal (ET) and
computational fluid dynamics (CFD) solutions, and with BETA CAE,
Cadence will enter structural analysis, the largest system analysis
segment.
BETA CAE is a highly respected industry leader, well-known for
its groundbreaking, innovative, high-performance simulation
software and best-in-class services. BETA CAE’s portfolio includes
its flagship pre- and post-processing products, which are the
industry gold standard, mechanical and structural simulation and
multiphysics analysis, and simulation, process, data, and resources
management (SPDRM) solutions, among others. BETA CAE has a very
strong footprint in the automotive vertical sector, delivering
solutions to the top 10 global automobile manufacturers and most
Formula One racing teams, as well as leading customers in the
aerospace, industrial and healthcare industries. BETA CAE customers
include marquee names such as Honda Motor Company Ltd., General
Motors Company, Stellantis, Renault Group, Volvo Cars and Lockheed
Martin Corporation, among others.
“Cadence entered the multiphysics space several years ago
through organic innovation and acquisitions. This strategic
acquisition reaffirms our commitment to continued growth in this
critical domain,” said Dr. Anirudh Devgan, president and CEO,
Cadence. “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. These solutions are particularly important in automotive,
where convergence of electrical and mechanical designs is further
driven by an increasing shift towards electric vehicles, requiring
deeper design team collaboration in integrated workflows.”
“For more than two decades we’ve led the evolution of
engineering simulation, first by establishing our reputation in the
land mobility sector, and then successfully expanding to broad
deployments across aerospace, defense, biomechanics, electronics,
energy and other industries,” said Panagiotis Kouvrakis, chairman
of BETA CAE. “We are very excited to join the Cadence team and are
looking forward to advancing success through our shared values and
passion for innovation and engineering, and our unwavering
commitment to customers and partners.”
BETA CAE provides a complete platform that accommodates the
entire simulation and analysis flow for multiphysics system
simulations, spanning mechanical/structural, CFD and EM. Its
flagship products include ANSA, an advanced, multidisciplinary
computer-aided engineering (CAE) pre-processor that encompasses all
necessary functionality for full-model build up in a single,
cohesive, integrated environment, and META, an advanced,
multidisciplinary CAE post-processor for optimally visualizing data
and simulation results and creating reports, powered with
state-of-the-art augmented reality capabilities. Additionally, BETA
CAE’s EPILYSIS and FATIQ solvers enable customers to efficiently
solve structural analysis and optimization problems. The SPDRM tool
addresses the integrated orchestration of data, processes and
resources by providing a simple and intuitive way to capture,
deploy, manage and improve CAE processes. BETA CAE’s products are
very complementary to Cadence’s multiphysics system analysis
portfolio, which includes Clarity™, Celsius™, Sigrity™, Voltus™,
Fidelity™ and the recently announced Millennium™ M1 multiphysics
platform, addressing the EM, thermal, signal and power integrity,
and CFD domains.
Headquartered in Lucerne, Switzerland, BETA CAE has a primary
R&D center in Thessaloniki, Greece and 13 additional offices
worldwide.
The acquisition is expected to close in the second quarter of
2024, subject to receipt of regulatory approvals and other
customary closing conditions. BETA CAE has annual revenue of about
$90 million, and Cadence expects BETA CAE to contribute
approximately $40 million to 2024 revenue. Cadence expects the
transaction to be approximately 12 cents dilutive to its 2024
earnings per share and to become accretive in 2025 (in each case,
on a non-GAAP basis), based on Cadence’s debt repayment and share
repurchase plans.
About Cadence
Cadence is a pivotal leader in electronic systems design,
building upon more than 35 years of computational software
expertise. The company applies its underlying Intelligent System
Design™ strategy to deliver software, hardware and IP that turn
design concepts into reality. Cadence® customers are the world’s
most innovative companies, delivering extraordinary products from
chips to boards to complete systems for the most dynamic market
applications, including hyperscale computing, 5G communications,
automotive, mobile, aerospace, consumer, industrial and healthcare.
For nine years in a row, Fortune magazine has named Cadence one of
the 100 Best Companies to Work For. Learn more at
www.cadence.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, including but not limited
to, statements regarding Cadence’s proposed acquisition of BETA
CAE, the anticipated timeline and closing of the proposed
transaction, the anticipated financing for the transaction, BETA
CAE’s and Cadence’s talent, technologies and product offerings,
business strategy, plans and opportunities, industry and market
trends including TAM estimates, the expected benefits and impact of
the proposed transaction and combined business on Cadence’s growth
in the multiphysics space, BETA CAE’s annual revenue and Cadence’s
financial outlook, including expected revenue contribution and
earnings impact, and Cadence’s debt repayment and share repurchase
plans. Forward-looking statements are based on current
expectations, estimates, forecasts and projections. Words such as
“expect,” “anticipate,” “should,” “believe,” “hope,” “target,”
“project,” “goals,” “estimate,” “potential,” “predict,” “may,”
“will,” “might,” “could,” “intend,” “shall” and variations of these
terms and similar expressions are intended to identify
forward-looking statements, although not all forward-looking
statements contain these identifying words. Forward-looking
statements are subject to a number of risks, uncertainties and
other factors, many of which are outside Cadence’s control. For
example, the markets for BETA CAE’s or Cadence’s products and
services may develop more slowly than expected or than they have in
the past; operating results and cash flows may fluctuate more than
expected; risks associated with tax liabilities or changes in
applicable tax laws or interpretations to which the proposed
transaction or parties thereto are subject; BETA CAE or Cadence may
fail to satisfy the closing conditions, including obtaining
required regulatory approvals, in a timely manner or at all;
uncertainties as to the availability of financing for the proposed
transaction upon acceptable terms on a timely basis and associated
costs and expenses, including applicable interest rates;
uncertainty as to the amount of shares to be issued by Cadence to
acquire BETA CAE due to fluctuations in the trading prices of
Cadence’s common stock; Cadence may fail to successfully acquire
and integrate BETA CAE; Cadence may fail to realize the anticipated
benefits of the proposed acquisition; Cadence may incur
unanticipated costs or other liabilities in connection with
acquiring or integrating BETA CAE; Cadence may not repay debt or
maintain share repurchases as anticipated, including as a result of
insufficient free cash flow or use of cash for other purposes; the
potential impact of the announcement or consummation of the
proposed acquisition on relationships with third parties, including
employees, customers, partners and competitors; Cadence may be
unable to motivate and retain key personnel; changes in or failure
to comply with legislation or government regulations could affect
the closing of the proposed transaction or post-closing operations
and results of operations; and macroeconomic and geopolitical
conditions could deteriorate. Further information on potential
factors that could affect Cadence’s ability to successfully acquire
and integrate BETA CAE or otherwise realize the anticipated
benefits of the proposed acquisition is included in Cadence’s most
recent report on Form 10-K and its other filings with the
Securities and Exchange Commission. The forward-looking statements
included in this press release represent Cadence’s views as of the
date of this press release, and Cadence disclaims any obligation to
update any of them publicly in light of new information or future
events.
© 2024 Cadence Design Systems, Inc. All rights reserved
worldwide. Cadence, the Cadence logo and the other Cadence marks
found at www.Cadence.com/go/trademarks are trademarks or registered
trademarks of Cadence Design Systems, Inc. All other trademarks are
the property of their respective owners.
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