Recently, the globally renowned semiconductor Electronic Design Automation (EDA) company Synopsys announced that it has entered into a definitive acquisition agreement with Ansys. According to the terms of the agreement, Synopsys will acquire Ansys for $197.00 per share in cash plus 0.3450 shares of Synopsys common stock. Based on the closing price on December 21, 2023, this transaction values Ansys at approximately $35 billion (equivalent to about 251.682 billion Chinese yuan).
This acquisition is regarded by the industry as a major merger. Synopsys's leading technology in the EDA field will be combined with Ansys's extensive simulation and analysis product line, and it is expected to jointly create a leader in the field of chip-to-system design solutions. Currently, Synopsys has a market value of about $75.16 billion, while Ansys's market value is approximately $30.1 billion.
Synopsys plans to raise $19 billion in cash to finance the acquisition through cash reserves and debt financing, having obtained $16 billion in fully committed debt financing. After the acquisition is completed, approximately 16.5% of the shares of the merged company will be owned by Ansys shareholders.
The acquisition is expected to be completed in the first half of 2025. It will not only promote innovation in semiconductor design technology and simulation analysis but will also provide customers with more comprehensive and efficient solutions, and bring significant financial and strategic advantages to the merged company.
Ansys's business primarily includes software licensing and maintenance and other services, with its software licensing revenue accounting for about half of its total revenue, while maintenance and other services income is slightly higher than software licensing. Since 2016, Ansys's gross margin has remained above 85%, demonstrating its strong profitability.
This acquisition may trigger a review by regulatory agencies, particularly in key markets such as China. The boards of both companies have hired independent advisors to assess regulatory risks. It is worth mentioning that over the past 12 months, Synopsys and Ansys's stock prices have both risen significantly amid the artificial intelligence boom.
The two companies have been collaborating since 2017, providing solutions for chip designers to assess chip quality standards, with the aim of improving the efficiency of the overall design process. Ansys's powerful simulation capabilities play an important role in multiphysics simulation, especially in the current industry trend towards "small chips". After the merger, the combined Synopsys is likely to achieve a comprehensive in-house chip design process.
This acquisition represents a development trend in the EDA industry and the entire industrial software industry, where companies complement their weaker areas through the acquisition of high-quality enterprises, achieving more comprehensive and powerful product and service capabilities. This important merger will bring new development opportunities and challenges to the industry.
The merger of Synopsys and Ansys marks a strong alliance between two industry giants and is expected to have a profound impact on the semiconductor design technology and simulation analysis fields.
