Siemens to Acquire Altair Engineering: A Landmark Deal Anticipated to Bolster Digital Transformation
Siemens AG has announced its strategic acquisition of Altair Engineering, a move set to significantly enhance its capabilities in the realms of simulation, artificial intelligence, and data science, marking a crucial milestone in Siemens' ongoing digital transformation journey. The acquisition, hailed as synergistic by Siemens officials, is poised to accelerate digital and sustainability transformations across industries by merging the digital worlds with real-world applications.
The announcement was made by Roland Busch, President and CEO of Siemens AG, who emphasised how the acquisition aligns with the company's long-standing commitment to industrial software leadership. “Acquiring Altair marks a significant milestone for Siemens. The additional capabilities in simulation, high performance computing, data science, and artificial intelligence integrated with Siemens Xcelerator will create the world’s most complete AI-powered design and simulation portfolio,” Busch stated.
Roland Busch's sentiments were echoed by Siemens’ Chief Financial Officer, Ralf P. Thomas, who highlighted the financial prudence of the acquisition. Thomas noted that it underpins Siemens’ balanced capital allocation objectives while promising a notable boost to earnings per share within two years of transaction closure.
The acquisition reflects the growth trajectory of Altair Engineering, which was established in 1985 in Detroit. Altair has evolved into a formidable global entity providing solutions in simulation and analysis, data science, AI, and high-performance computing. Altair's founder and CEO, James Scapa, underscored the mutual benefits expected from this merger. “We believe this combination of two strongly complementary leaders in the engineering software space will enhance innovation with computational intelligence,” he said.
The integration of Altair into Siemens is expected to notably increase Siemens’ digital business revenue by 8%, adding approximately EUR 600 million to the existing revenue reports of around EUR 7.3 billion from fiscal year 2023. Siemens anticipates that synergistic opportunities, particularly in cross-selling the complementary portfolios, will manifest revenue growth of more than USD 500 million annually in the mid-term, with long-term prospects exceeding USD 1.0 billion annually. Siemens also expects operational efficiencies leading to EBITDA impacts exceeding USD 150 million per annum by the second year after closing the deal.
Financially, the acquisition will be completely cash-financed using Siemens' resources, strengthened by recent divestments, including the sale of Innomotics. Additional liquidity support may be derived from selling shares in publicly listed Siemens entities. The deal, pending customary regulatory approvals, is projected to close in the second half of 2025.
Altair Engineering, known for its world-class offerings in simulation and analysis, data science, and high-performance computing, was publicly listed on Nasdaq in 2017. The company has cultivated a robust client base across industries from manufacturing to life sciences and energy.
This acquisition not only enhances Siemens' digital portfolio but also solidifies its position as a frontrunner in the industrial software market, potentially revolutionising how industries approach digital transformation and sustainability initiatives. The integration promises streamlined access to simulation expertise, reducing market-entry timelines and expediting design iterations, further embedding Altair's technological prowess within Siemens' substantial global network.
Source: Noah Wire Services