Hexagon has announced a definitive agreement to divest its Design & Engineering business, including the legacy MSC Software operations, to Cadence Design Systems for about €2.7 billion. The deal aligns with Hexagon’s broader strategy to streamline its portfolio and concentrate future investments on core segments where it holds market-leading positions.
Under the terms of the deal, 30 percent of the purchase price will be paid in Cadence common stock, with the remaining 70 percent in cash. The transaction is expected to close in the first quarter of 2026, pending regulatory approvals and customary closing conditions. Hexagon plans to use the proceeds for general corporate purposes, which may include reducing debt and funding strategic acquisitions that support long-term growth. These plans also factor in the anticipated separation of Octave, a move still on track for the first half of 2026.
The Design & Engineering business contributed roughly €265 million to Hexagon’s Manufacturing division revenue in 2024, with profitability exceeding group averages. The sale is expected to generate a financial gain, with further details to be disclosed in Hexagon’s Q3 2025 interim report.
Following the deal, Hexagon will maintain a strong presence in software and services, particularly in areas that complement its sensor and robotics portfolio. On a pro forma basis, excluding both D&E and Octave, software and services would still represent more than 40 percent of total revenues, with recurring revenue accounting for over 25%.
KEY QUOTES:
“Today’s announcement is a step in our plan to streamline Hexagon’s portfolio and focus on the capture, measurement, and use of real-world data, while also strengthening our financial flexibility. Our D&E business is a leading provider of mission critical CAE software solutions and has delivered strong results since we acquired MSC in 2017, over which time we have been successfully transitioning the business to a subscription model. However, the engineering simulation market is evolving rapidly, with electronic design automation suppliers increasingly taking a leading role, a trend which is harder for Hexagon to follow. By transitioning D&E to Cadence, a global leader in this field, and establishing a long-term collaboration between our companies, we are creating a stronger future for our customers, employees, and shareholders.”
Ola Rollén, Chairman of the Board for Hexagon
“D&E’s comprehensive portfolio of solutions is well positioned to support Cadence’s Multiphysics System Analysis business, with compelling opportunities for synergistic growth ahead. As we simplify and focus our portfolio, we can accelerate innovation and capital deployment in areas that bring greater synergies across our businesses and augment our market leading positions, both across our sensor portfolio and remaining, core software businesses.”
Anders Svensson, President and CEO, Hexagon
