Siemens (SIE) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of Altair Engineering enhances leadership in industrial software and AI, creating the world's most complete AI-powered design and simulation portfolio.

• Altair's simulation, data science, HPC, and AI capabilities complement existing offerings, expanding digital twin solutions and Siemens Xcelerator.

• The deal accelerates digital transformation and democratizes simulation, making advanced tools accessible to a broader range of users.

• Leverages Siemens' domain expertise and industrial data with Altair's data science to drive innovation and sustainability.

• Highly synergetic acquisition aligns with capital allocation strategy for sustainable value creation and minimal portfolio overlap ensures smooth integration.

Financial terms and conditions

• Siemens will acquire 100% of Altair for $113 per share, implying an enterprise value of $10 billion.

• The offer represents a 19% premium to Altair's unaffected closing price on October 21, 2024.

• Transaction multiples are 14x FY25e sales and 31x FY25e adjusted EBITDA, including near-term cost synergies.

• The transaction will be fully cash financed from Siemens' existing resources, recent divestments, and strong balance sheet.

• Capital structure remains within target corridor post-closing, with no financing conditions and closing expected in H2 2025.

Synergies and expected cost savings

• Over $150 million in annual cost synergies expected by year two post-closing, driven by delisting, IT, sales tool harmonization, and real estate consolidation.

• Revenue synergies projected at $500 million annually mid-term and over $1 billion long-term, mainly from cross-selling and Altair's access to Siemens' global customer base.

• Integration experience from prior acquisitions supports confidence in achieving synergies.

• Significant synergies from providing Altair full access to Siemens' global go-to-market footprint.