DEFA14A: Siemens to Acquire Altair Engineering for $10.6 Billion in Landmark Deal

Siemens is set to acquire Altair Engineering for $113 per share in cash, valuing the company at approximately $10.6 billion, marking a significant consolidation in the engineering software sector.

Summary

• Altair Engineering Inc. has entered into a definitive agreement to be acquired by Siemens for $113.00 per share in cash, representing an equity value of approximately $10.6 billion.
• The offer represents a 19% premium to Altair's closing price on October 21, 2024, and a 13% premium to its all-time high.
• The transaction has been unanimously approved by Altair's Board of Directors and is expected to close in the second half of 2025.
• The closing is subject to regulatory approvals, Altair stockholder approval, and customary closing conditions.
• Upon completion, Altair's common stock will be delisted from the Nasdaq Global Select Market.
• Key advisors for the deal include Citi and J.P. Morgan Securities LLC as financial advisors to Altair, and Davis Polk & Wardwell LLP and Lowenstein Sandler LLP as legal advisors.
• The agreement includes provisions for termination fees, with Altair required to pay Siemens $372.0 million under certain circumstances, and Siemens required to pay Altair $638.0 million under other circumstances.
• James R. Scapa, Altair's founder and CEO, and affiliated entities have entered into a voting agreement with Siemens, obligating them to vote approximately 54% of the outstanding Common Shares in favor of the adoption of the Merger Agreement.

Sentiment

Score: 8

Explanation: The document conveys a positive sentiment due to the significant premium offered to Altair stockholders and the strategic benefits of the acquisition for both companies. The deal is expected to enhance Siemens' capabilities and provide certainty of value for Altair's investors.

Positives

• Altair stockholders will receive a significant premium for their shares.
• The acquisition combines Altair's strengths in simulation, data science, and HPC with Siemens' position in mechanical and EDA design.
• Siemens' resources and strategic relationships could accelerate Altair's innovation and market reach.
• The transaction provides certainty of value for Altair stockholders.

Negatives

• Altair will be delisted from the Nasdaq Global Select Market after the transaction closes.
• The deal is subject to regulatory and stockholder approvals, introducing potential uncertainty regarding its completion.
• The agreement includes provisions for termination fees, which could be triggered under certain circumstances.

Risks

• The transaction may not close if regulatory or stockholder approvals are not obtained.
• The integration of Altair into Siemens may present challenges.
• There is a risk of competing offers emerging, although the voting agreement with key shareholders makes this less likely.
• Potential litigation relating to the merger could delay or prevent the transaction.

Future Outlook

The transaction is expected to close in the second half of 2025, pending regulatory and stockholder approvals. Siemens anticipates that the acquisition will enhance its digital and sustainability transformation capabilities.

Management Comments

• James Scapa, Altair's founder and CEO, stated that the combination of Altair and Siemens will bring together complementary strengths in engineering software and drive innovation with computational intelligence.
• Roland Busch, President and CEO of Siemens AG, believes that acquiring Altair will create the world's most complete AI-powered design and simulation portfolio.

Industry Context

The acquisition reflects a trend of consolidation in the engineering software space, as companies seek to offer more comprehensive solutions and leverage synergies between simulation, data science, and design tools. Siemens' acquisition of Altair positions it to compete more effectively with other major players in the industry, such as Ansys and Dassault Systèmes.

Comparison to Industry Standards

• The acquisition of Altair by Siemens is comparable to other major deals in the engineering software space, such as Ansys' acquisition of Fluent and Dassault Systèmes' acquisition of SIMULIA.
• The premium offered to Altair stockholders is in line with historical premiums paid in similar transactions.
• The combined entity will offer a broader portfolio of solutions, potentially creating a competitive advantage over rivals.

Related Party Transactions

• James R. Scapa and affiliated entities have entered into a voting agreement with Siemens, obligating them to vote approximately 54% of the outstanding Common Shares in favor of the adoption of the Merger Agreement.

Stakeholder Impact

• Altair stockholders will receive a significant premium for their shares.
• Altair employees may experience changes as the company integrates with Siemens.
• Customers may benefit from a broader portfolio of solutions and enhanced innovation.
• Suppliers may be affected by changes in procurement practices following the acquisition.

Next Steps

• Altair will file a proxy statement with the SEC.
• Altair will seek stockholder approval for the transaction.
• The transaction is subject to regulatory approvals.
• The companies will work to satisfy customary closing conditions.

Key Dates

Keywords

acquisition, merger, Siemens, Altair, stockholders, Merger Agreement, regulatory approvals, premium, cash consideration, voting agreement