8-K: Altair Engineering Finalizes Merger with Siemens, Amends Indenture for Convertible Notes

Altair Engineering completed its merger with Siemens Industry Software on March 26, 2025, and amended its indenture agreement to reflect the change in control and conversion rights of its 1.750% Convertible Senior Notes due 2027.

Summary

• Altair Engineering Inc. completed its merger with Siemens Industry Software Inc. on March 26, 2025.
• The merger was executed under an agreement dated October 30, 2024, with Astra Merger Sub Inc., a subsidiary of Siemens, merging into Altair, which survived as a wholly-owned subsidiary of Siemens.
• Each share of Altair's Class A and Class B common stock was converted into the right to receive $113.00 in cash.
• The company entered into a First Supplemental Indenture to its existing indenture with U.S. Bank Trust Company related to its 1.750% Convertible Senior Notes due 2027.
• As of the closing date, $230 million aggregate principal amount of the Notes were outstanding.
• The merger constitutes a Share Exchange Event, a Fundamental Change, and a Make-Whole Fundamental Change under the indenture.
• The conversion right for each $1,000 principal amount of notes is now based on a cash payment.
• For conversions related to the merger, the cash amount is $1,618.7928 ($113.00 multiplied by the sum of 13.9505 plus 0.3751).
• For conversions not related to the merger, the cash amount is $1,576.4065 ($113.00 multiplied by 13.9505).
• Noteholders have the right to require the company to repurchase their notes at 100% of the principal amount plus accrued interest.
• Altair terminated its Third Amended and Restated Credit Agreement with JPMorgan Chase Bank, retaining only one outstanding unsecured letter of credit.
• Trading of Altair's Class A Common Shares on NASDAQ was suspended, and the company will deregister the shares under the Exchange Act.

Sentiment

Score: 7

Explanation: The document is factual and reports the completion of a previously announced merger. The outcome is positive for shareholders who received a cash payout, but negative for those who preferred to remain invested in a public company. Overall, the sentiment is neutral to slightly positive.

Positives

• Shareholders received $113.00 per share in cash, providing immediate liquidity.
• Noteholders have the right to require the company to repurchase their notes at 100% of the principal amount plus accrued interest.
• The merger provides Altair with the resources and stability of being a wholly-owned subsidiary of Siemens.
• Termination of the credit agreement simplifies the company's financial structure.

Negatives

• Altair is no longer a publicly traded company, which may limit future access to public capital markets.
• Former shareholders no longer have equity participation in the company's future growth.
• The company is now subject to Siemens' internal regulations and policies.

Risks

• Integration risks associated with merging Altair's operations into Siemens.
• Potential loss of key personnel following the merger.
• Changes in strategic direction or priorities under Siemens' ownership.
• The company is now subject to Siemens' internal regulations and policies.

Future Outlook

Altair Engineering will operate as a wholly-owned subsidiary of Siemens Industry Software Inc. The company will focus on integrating its operations and technologies with Siemens.

Industry Context

The acquisition of Altair Engineering by Siemens reflects a trend of consolidation in the engineering software industry, as larger companies seek to expand their capabilities and market reach.

Comparison to Industry Standards

• The $113 per share cash consideration represents a premium compared to Altair's recent trading prices, aligning with typical acquisition premiums in the software industry.
• Similar acquisitions in the engineering software space have seen deal multiples in the range of 10-15x revenue, suggesting the Altair deal is within industry norms.
• The conversion terms of the convertible notes are standard practice in M&A transactions involving companies with outstanding convertible debt.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders received cash consideration for their shares.
• Employees may experience changes in their roles and responsibilities as a result of the merger.
• Customers may benefit from the integration of Altair's technology with Siemens' broader product portfolio.
• Suppliers may need to adapt to Siemens' procurement policies and procedures.

Next Steps

• Integration of Altair Engineering into Siemens Industry Software.
• Deregistration of Altair's Class A Common Shares with the SEC.
• Repurchase of the 1.750% Convertible Senior Notes due 2027, if required by noteholders.

Key Dates

Keywords

merger, acquisition, Siemens, Altair Engineering, convertible notes, indenture, delisting, NASDAQ, cash consideration, fundamental change