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Synopsys reaches $35 billion deal to buy Ansys| GuyWhoKnowsThings


Synopsys, a key Silicon Valley supplier to the chip industry, said on Tuesday it had agreed to pay $35 billion for Ansys, a Pennsylvania company that makes software used to simulate and analyze product designs for electronics makers, manufacturers automobiles, defense contractors and others. .

The deal, which closed for a combination of cash and stock, remains a $14 billion deal this month by Hewlett Packard Enterprise to buy Juniper Networks, uniting a large computer maker with a networking equipment specialist. It was the latest sign that times are changing in the technology sector, which is experiencing slow sales for many types of hardware and a frenzy over artificial intelligence.

AI has led to huge expenses in data centers and has also led many giant internet companies to start designing their own chips. Some automakers, which have become a major new source of chip demand amid pressure 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. He has worked with Ansys since 2017 to gain more clients for these types of tasks.

Sassine Ghazi, CEO of Synopsys, said the desire to buy Ansys was motivated 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 need to come together,” he said on a conference call with analysts.

Ghazi took over his role earlier 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 previously reported on talks between Synopsys and Ansys and said Cadence's interest in Ansys had helped lead to that company being acquired.

A spokesperson for Cadence declined to comment.

Ansys was founded in 1970 by John Swanson, a mechanical engineer who developed software in the 1960s for Westinghouse to help analyze stresses in nuclear reactors.

The company added other products over the years and became a major player in engineering software. Ajei Gopal, its CEO since 2017, was previously an operating partner at Silver Lake, a private equity firm.

Synopsys said the payment to Ansys shareholders had an implied value of $390.19 per share, based on Synopsys' share price on Dec. 21, the day before The Journal reported on talks about the deal. That price represents a 35 percent premium to Ansys' average share price in the 60 days 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 quickly begin contributing to higher profits.

The companies predicted the deal would close in the first half of 2025.


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