- Ansys (NASDAQ:ANSS) — a global leader and innovator of engineering simulation software — announced that it entered into a definitive agreement to buy Analytical Graphics (AGI). These are the details.
Ansys (NASDAQ:ANSS) — a global leader and innovator of engineering simulation software — announced that it entered into a definitive agreement to buy Analytical Graphics (AGI). AGI is a premier provider of mission-driven simulation, modeling, testing, and analysis software for aerospace, defense, and intelligence applications.
After the deal is closed, the acquisition will expand the scope of Ansys’ solution offering, empowering users to solve challenges by simulating from the chip now all the way to a customers’ entire mission such as tracking an orbiting satellite and its periodic connection to ground stations. The purchase price for the deal is $700 million, of which 67% of the consideration will be paid in cash and 33% will be paid through the issuance of Ansys common stock.
In connection with the deal, Ansys anticipates obtaining new debt financing to fund a significant portion of the cash component of the purchase price. AGI has pioneered digital mission engineering, a key component of digital transformation. And after the deal is closed, the acquisition of AGI will expand Ansys’ simulation footprint into customers’ missions — an area of simulation beyond the traditional component or product level. Missions are usually known to be higher-level endeavors that support space, telecommunications, national defense, and search-and-rescue initiatives. And mission-driven simulation, integrated with systems engineering, enables organizations to provide the best configuration to achieve various desired mission objectives.
Digital mission engineering is known for empowering organizations to evaluate then optimize the performance of engineered systems across the overall mission. And it also helps them effectively respond to evolving mission objectives, which often change during the course of a system’s lifecycle. As a result, the missions are more likely to succeed, saving the customer time, money, and other crucial resources.
Experts project that over 10,000 satellites will be launched into orbit in the next five years. And AGI’s software will help its customers design, launch, and safely operate the next generation of satellite constellations — which are critical for navigation, earth imagery, weather, and communications. AGI’s software models and simulates many important elements like a satellite’s orbital mechanics, enabling users to design, operate, or use space systems with improved efficiency and effectiveness.
Based in Exton, Pennsylvania, AGI has a 30-year track record of success across industries with hundreds of customers around the world, particularly in the government and federal aerospace and defense industries. And as an existing Ansys partner, AGI’s technology already connects into the Ansys simulation portfolio. Once the deal is closed, AGI’s strong customer relationships will help Ansys reach new aerospace and defense customers while the Ansys sales channel can drive mission-based simulation to its broader existing installed base.
The deal is expected to close in the fourth quarter of 2020, subject to receipt of regulatory clearance and the satisfaction of other customary closing conditions. And the transaction is not expected to have a meaningful impact on the 2020 non-GAAP results.
Ansys is expecting that the transaction will add $75 million to $85 million of non-GAAP revenue to its 2021 results and will be modestly accretive to non-GAAP diluted earnings per share. And Non-GAAP projections exclude the effects of acquisition adjustments to deferred revenue, stock-based compensation, amortization of acquired intangible assets and transaction costs related to the acquisition.
KEY QUOTES:
“Ansys’ acquisition of AGI will help drive our strategy of making simulation pervasive from the smallest component now through a customer’s entire mission. It will also expand the use of simulation in the key aerospace sector, where the stakes can be at their highest levels. We are excited to welcome the expert AGI team – and to expand the reach of their world-class technology to industries outside of aerospace, including for autonomy and 5G applications.”
— Ajei Gopal, president and CEO of Ansys
“In the three decades since our founding, we have continuously invested in our technology to create and advance digital mission engineering. We are thrilled to become part of Ansys so we can dramatically extend the reach of our world-class products and help more customers accomplish their critical missions.”
— Paul Graziani, CEO and co-founder of AGI
