DEFM14A: Siemens Industry to Acquire Altair Engineering for $113 Per Share in Cash

Altair Engineering Inc. has entered into an agreement to be acquired by Siemens Industry Software Inc. for $113 per share in cash, representing a significant premium over its recent trading prices.

Summary

• Altair Engineering Inc. is set to be acquired by Siemens Industry Software Inc. for $113 per share in cash.
• The merger agreement was unanimously approved by both Altair's and Siemens Industry's boards of directors on October 30, 2024.
• The offer represents a 19% premium to Altair's closing price on October 21, 2024, a 23% premium over the 6-month volume weighted average, and a 51% premium over the closing price on December 21, 2023.
• Altair stockholders will be asked to approve the merger agreement at a special meeting scheduled for January 22, 2025.
• Siemens Industry and Altair expect the merger to be completed in the second half of 2025, pending regulatory approvals and customary closing conditions.
• Key supporting stockholders, owning approximately 54% of Altair's voting power, have agreed to vote in favor of the merger.
• The agreement includes provisions for termination fees, with Altair potentially owing Siemens Industry $372 million under certain circumstances, and Siemens Industry potentially owing Altair $638 million under other circumstances.
• The transaction is subject to regulatory approvals, including those required under the Hart-Scott-Rodino Antitrust Improvements Act.

Sentiment

Score: 7

Explanation: The document is generally positive, outlining a merger agreement with a significant premium for stockholders. While there are inherent risks and uncertainties, the overall tone is optimistic about the transaction's completion.

Positives

• Stockholders will receive $113 per share in cash, providing immediate liquidity.
• The offer price represents a significant premium over recent trading prices.
• The merger agreement has unanimous support from Altair's board of directors.
• Key stockholders have committed to voting in favor of the merger, increasing the likelihood of approval.
• Siemens AG is guaranteeing Siemens Industry's payment obligations, providing financial security.
• Stockholders have appraisal rights if they disagree with the merger terms.

Negatives

• The merger will result in Altair ceasing to be a publicly traded company.
• Stockholders will not participate in any future growth or earnings of the combined entity.
• The transaction is taxable to Altair stockholders.
• The merger agreement restricts Altair's ability to solicit other acquisition proposals.
• The merger is subject to regulatory approvals, which could delay or prevent completion.

Risks

• The merger may not be completed if regulatory approvals are not obtained.
• Litigation could delay or prevent the merger.
• The merger agreement could be terminated under certain circumstances.
• The merger could disrupt Altair's business and operations.
• Key employees may leave due to uncertainty surrounding the merger.
• The price of Altair's stock could decline if the merger is not completed.

Future Outlook

The merger is expected to be completed in the second half of 2025, subject to customary closing conditions and regulatory approvals.

Management Comments

• On behalf of the Altair board of directors, thank you for your continued support.
• The Altair board of directors unanimously recommends that Altair stockholders vote (1) FOR the merger agreement proposal, (2) FOR the merger-related compensation proposal and (3) FOR the adjournment proposal.

Industry Context

The announcement follows a trend of consolidation in the industrial software space, with Siemens seeking to expand its offerings in simulation, design, high-performance computing, data analytics, and artificial intelligence.

Comparison to Industry Standards

• The merger consideration represents a premium of approximately 19% to the closing price of Altair's Class A common stock on October 21, 2024.
• The merger consideration represents a premium of approximately 23% to the 6-month volume weighted average closing price of Altair's Class A common stock for the period ending October 21, 2024.
• The merger consideration represents a premium of approximately 51% to the closing price of Altair's Class A common stock on December 21, 2023.
• The termination fees are consistent with those in comparable transactions.

Legal Proceedings

• As of the date of this proxy statement, there are no pending lawsuits challenging the merger.
• Potential plaintiffs may file lawsuits challenging the merger in the future.

Stakeholder Impact

• Shareholders will receive $113 per share in cash.
• Employees' roles and benefits will be determined post-merger by Siemens Industry.
• Customers and suppliers may experience changes as a result of the merger.

Next Steps

• Altair stockholders will vote on the merger agreement proposal at a special meeting on January 22, 2025.
• Regulatory approvals must be obtained.
• The merger is expected to close in the second half of 2025.

Key Dates

Keywords

merger agreement, Altair Engineering, Siemens Industry, acquisition, stockholders, merger, Siemens, ALTR, proxy statement, voting