Synopsys announced it has entered into a definitive agreement with Clearlake Capital Group, L.P. and Francisco Partners to sell its Software Integrity Group business in a transaction valued at up to $2.1 billion. Up to $475 million in cash will be payable upon Francisco Partners and Clearlake hitting a specified rate of return in connection with one or more liquidity transactions. Upon the deal’s completion, the business will emerge as a newly independent application security testing software provider.
The current Software Integrity Group management team is expected to lead the newly independent, privately held company after the transaction closes. And the name of the new standalone entity will be announced later. Synopsys is committed to a seamless transition for the Software Integrity Group team, customers, and partners.
Synopsys’ Software Integrity Group offers integrated software solutions that transform how development teams build and deliver software, accelerating innovation while addressing business risk. Its comprehensive, industry-leading portfolio of software security products interoperates with third-party and open-source tools, enabling organizations to leverage existing investments to build the best security program for them.
The deal, approved by Synopsys’ Board of Directors, is expected to close in the second half of the year, subject to closing conditions.
J.P. Morgan served as financial advisor and Cleary Gottlieb Steen & Hamilton served as legal advisor to Synopsys. And Evercore, Deutsche Bank, and Barclays acted as financial advisors to Clearlake and Francisco Partners. Sidley Austin acted as lead legal advisor to Clearlake and Francisco Partners. Plus, Simpson Thacher & Bartlett also advised Francisco Partners.
KEY QUOTES:
“Clearlake and Francisco Partners have a strong track record of success investing in growing software platforms and are ideal partners to continue growing this business as an independent, world-class software security provider. For Synopsys, this move sharpens our focus on the unprecedented, high-growth opportunity we have in our core business – where the engineering of silicon and systems is converging as technology R&D teams look to capitalize on this AI-driven era of pervasive intelligence.”
- Sassine Ghazi, president and CEO of Synopsys
“We are excited to partner with Synopsys to complete the carve-out of its Software Integrity Group, a leading provider of application security testing solutions. Francisco Partners has a long history of working with leading technology companies to carve-out divisions and business units that can benefit from greater focus and flexibility as standalone entities, and where our Francisco Partners Consulting operating team can bring resources and expertise to help accelerate growth.”
- Dipanjan “DJ” Deb, Co-Founder and CEO of Francisco Partners
“As security becomes more embedded in DevOps workflows, we believe the demand and importance of application security testing providers will continue to rise. We are ready to leverage Clearlake’s O.P.S. framework to foster operational enhancements, build upon the Software Integrity Group’s robust product offering, and fuel new growth as a standalone enterprise.”
- Behdad Eghbali, Co-Founder and Managing Partner of Clearlake
“Advancements in generative artificial intelligence technology are likely to disrupt the software development lifecycle over time, increasing the velocity of code generation and introducing new forms of software risk. The Software Integrity Group’s strong portfolio of application security testing products provides enterprise customers with tools that integrate security into developer’s workflows. This ensures developers can create high quality, secure and compliant code that minimizes cybersecurity risks, including risks arising from generative artificial intelligence, and directly addressing a growing need in the market.”
- Prashant Mehrotra, Partner, and Sean Courtney, Principal, at Clearlake
“Enterprise engineering and security teams face an increasingly dynamic and challenging threat environment today, and ensuring the quality and security of their software applications has become a top strategic priority. Synopsys’ Software Integrity Group is a leader in application security testing solutions, providing a comprehensive platform for software engineers and security teams to secure and protect their mission-critical software applications. We look forward to working with the leadership team at the Software Integrity Group to accelerate growth and innovation as a standalone company.”
- Brian Decker and Evan Daar, Partners at Francisco Partners
