Cadence Design Systems recently announced it has entered into a definitive agreement to acquire BETA CAE Systems International AG, a leading system analysis platform provider of multi-domain engineering simulation solutions. And the addition of BETA CAE’s proven technologies and talent will accelerate Cadence’s Intelligent System Design strategy by expanding its multiphysics system analysis portfolio and enabling entry into the structural analysis segment, unlocking a multi-billion-dollar incremental TAM opportunity.
Under the terms of the deal, Cadence will pay approximately $1.24 billion for the transaction, with 60 percent of the consideration paid in cash and 40% paid through the issuance of Cadence common stock to current BETA CAE shareholders. In connection with the deal, Cadence expects to obtain new debt financing to fund a portion of the cash component of the purchase price. Cadence plans to use the free cash flow generated by its existing operations to pay down debt incurred rapidly to fund the transaction while also maintaining share repurchases.
Increasing system complexity and time-to-market pressures from accelerating mechanical and electrical hyperconvergence and the digital transformation in multiple industries drive the need for multiphysics simulations early in the design cycle. In the past few years, Cadence expanded its system analysis portfolio to build a comprehensive multiphysics platform that includes electromagnetics (EM), electrothermal (ET), and computational fluid dynamics (CFD) solutions. Cadence will enter structural analysis with BETA CAE, the largest system analysis segment.
BETA CAE is a respected industry leader known for its innovative and high-performance simulation software. Its portfolio includes its flagship pre- and post-processing products, which are the industry gold standard, mechanical and structural simulation and multiphysics analysis, simulation, process, data, and resources management (SPDRM) solutions.
Plus, BETA CAE has a very strong footprint in the automotive vertical sector, delivering solutions to the top 10 global automobile manufacturers and most Formula One racing teams, as well as leading customers in the aerospace, industrial, and healthcare industries. BETA CAE’s customers include marquee names such as Honda Motor Company Ltd., General Motors Company, Stellantis, Renault Group, Volvo Cars, Lockheed Martin Corporation, and others.
BETA CAE offers a complete platform that accommodates the entire simulation and analysis flow for multiphysics system simulations, spanning mechanical/structural, CFD, and EM. Its flagship products include ANSA, an advanced, multidisciplinary computer-aided engineering (CAE) pre-processor that encompasses all necessary functionality for full-model build-up in a single, cohesive, integrated environment, and META, an advanced, multidisciplinary CAE post-processor for optimally visualizing data and simulation results and creating reports, powered with state-of-the-art augmented reality capabilities.
And BETA CAE’s EPILYSIS and FATIQ solvers enable customers to solve structural analysis and optimization problems efficiently. The SPDRM tool addresses the integrated orchestration of data, processes, and resources by providing a simple and intuitive way to capture, deploy, manage, and improve CAE processes. Plus, BETA CAE’s products are very complementary to Cadence’s multiphysics system analysis portfolio, which includes Clarity, Celsius, Sigrity, Voltus, Fidelity, and the recently announced Millennium M1 multiphysics platform, addressing the EM, thermal, signal, and power integrity, and CFD domains.
The deal is expected to close in the second quarter of 2024, subject to receipt of regulatory approvals and other customary closing conditions. And BETA CAE has annual revenue of about $90 million, and Cadence expects BETA CAE to contribute approximately $40 million to 2024 revenue. Cadence expects the deal to be approximately 12 cents dilutive to its 2024 earnings per share and to become accretive in 2025 (in each case, on a non-GAAP basis), based on Cadence’s debt repayment and share repurchase plans.
Based in Lucerne, Switzerland, BETA CAE has a primary R&D center in Thessaloniki, Greece, and 13 additional offices worldwide.
KEY QUOTES:
“Cadence entered the multiphysics space several years ago through organic innovation and acquisitions. This strategic acquisition reaffirms our commitment to continued growth in this critical domain. Combining our computational software expertise with BETA CAE’s rich technology and talent will enable us to offer a more comprehensive portfolio to customers, while opening significant new opportunities for Cadence by tapping into the structural analysis segment. These solutions are particularly important in automotive, where convergence of electrical and mechanical designs is further driven by an increasing shift towards electric vehicles, requiring deeper design team collaboration in integrated workflows.”
– Dr. Anirudh Devgan, president and CEO, Cadence
“For more than two decades we’ve led the evolution of engineering simulation, first by establishing our reputation in the land mobility sector, and then successfully expanding to broad deployments across aerospace, defense, biomechanics, electronics, energy and other industries. We are very excited to join the Cadence team and are looking forward to advancing success through our shared values and passion for innovation and engineering, and our unwavering commitment to customers and partners.”
– Panagiotis Kouvrakis, chairman of BETA CAE
