SAN JOSE, Calif. - Cadence Design (NASDAQ:CDNS) Systems, Inc. (NASDAQ:CDNS), a leader in electronic systems design, has announced a definitive agreement to acquire BETA CAE (NYSE:CAE) Systems International AG. This strategic move, valued at approximately $1.24 billion, will expand Cadence's system analysis portfolio, particularly in automotive, aerospace, industrial, and healthcare sectors.
The acquisition will integrate BETA CAE's multi-domain engineering simulation solutions into Cadence's Intelligent System Design™ strategy, marking Cadence's entry into the structural analysis market. The transaction is structured with 60% cash payment and 40% in Cadence common stock to BETA CAE shareholders.
Cadence plans to fund the cash portion through new debt financing and intends to rapidly pay down the incurred debt with free cash flow from its operations, while continuing share repurchases.
BETA CAE, recognized for its high-performance simulation software and services, has a strong presence in the automotive industry, serving the top 10 global automobile manufacturers and most Formula One racing teams. Its portfolio also includes customers like Honda Motor Company (NYSE:HMC) Ltd., General Motors Company (NYSE:GM), and Lockheed Martin Corporation (NYSE:LMT).
The company's flagship products, ANSA and META (NASDAQ:META), are known for their advanced pre- and post-processing capabilities in computer-aided engineering (CAE).
The acquisition is expected to close in the second quarter of 2024, pending regulatory approvals and customary closing conditions. BETA CAE, with an annual revenue of about $90 million, is anticipated to contribute approximately $40 million to Cadence's 2024 revenue.
The transaction is projected to be approximately 12 cents dilutive to Cadence's 2024 earnings per share on a non-GAAP basis, but accretive in 2025.
Dr. Anirudh Devgan, president and CEO of Cadence, expressed confidence that combining the two companies' technologies and expertise will offer a more comprehensive portfolio to customers and open new opportunities in the structural analysis segment. Panagiotis Kouvrakis, chairman of BETA CAE, echoed this sentiment, highlighting the shared values and commitment to innovation and customer service.
This report is based on a press release statement.
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