Altair Acquisition: Key Details, Impact, and What Comes Next

Siemens' acquisition of Altair Engineering for $10.6 billion marks a significant move in the industrial software and AI sectors. This strategic deal aims to enhance Siemens' digital and sustainability transformations by integrating Altair's expertise in simulation, data science, and high-performance computing with Siemens' strengths in mechanical and electronic design automation. The acquisition is expected to close in the second half of 2025.

What Is Altair?

Altair specializes in enterprise software solutions, offering platforms like Altair HPCWorks, HyperWorks, and RapidMiner. Their core services include AI-powered engineering, data analytics, electromagnetics, and structural analysis. Unique selling points include an open and programmable architecture through Altair One, award-winning data analytics, and a unique licensing model that reduces costs. Altair is recognized for its global optimization capabilities and is trusted by over 16,000 leading organizations worldwide.

Who Acquired Altair?

Siemens is a major player in the industrial sector, focusing on technological advancements and sustainability. The company leverages industrial AI to support businesses in achieving sustainability goals. Key products and services include industrial AI solutions, various products and services under "Produkte & Services," and industry-specific solutions under "Branchenlösungen." Siemens holds a significant market position, providing innovative solutions and maintaining a strong presence in both local and global markets.

When Was Altair Acquired?

Siemens announced its acquisition of Altair Engineering on October 30, 2024. This move aligns with industry trends focusing on digital transformation and AI integration. The deal, valued at $10.6 billion, is expected to close in the second half of 2025. This acquisition comes at a time when companies are increasingly leveraging AI and data analytics to enhance their product lifecycle management and simulation capabilities, positioning Siemens as a leader in industrial software.

Why Was Altair Acquired?

• Market Expansion: The acquisition allows Siemens to significantly expand its market presence in industrial software and AI. By integrating Altair's capabilities in simulation, high-performance computing (HPC), and data science, Siemens enhances its industrial software portfolio, positioning itself as a leader in these sectors. This move is expected to increase Siemens' market share in the PLM simulation software market from 9% to 15%, elevating its position from number 4 to number 2 behind Ansys.
• Technology Integration: Siemens benefits from Altair's advanced technologies in simulation, HPC, and AI. The integration of Altair's expertise with Siemens' Xcelerator platform aims to create the world's most comprehensive AI-powered design and simulation portfolio. This synergy is expected to accelerate digital and sustainability transformations for Siemens' customers, combining the strengths of both companies to offer a more complete and innovative suite of engineering software solutions.
• Competitive Advantage: The acquisition strengthens Siemens' competitive position by combining Altair's broad portfolio in simulation, data science, and HPC with Siemens' strong position in mechanical and EDA design. This strategic move enhances Siemens' comprehensive Digital Twin offering and unlocks significant revenue and cost synergies. The deal is expected to make Siemens a more credible rival to companies like Synopsys and Cadence Design Systems, contributing significantly to its annual revenue in the mid to long term.

Acquisition Terms

• Acquisition Price: $10.6 billion
• Payment Method: Cash payment for all outstanding shares of Altair's common stock, with Altair stockholders receiving $113.00 per share in cash
• Key Conditions or Agreements:
  • The transaction has been unanimously approved by the Altair Board of Directors
  • Closing is expected in the second half of 2025, subject to regulatory approvals, Altair stockholder approval, and satisfaction of customary closing conditions
  • Upon completion, Altair’s common stock will no longer be listed on any public stock exchange
  • Altair will file a Current Report on Form 8-K and a proxy statement on Schedule 14A with the SEC for further information regarding the terms and conditions of the definitive transaction agreements
  • The offer price represents a 19% premium to Altair's unaffected closing price on October 21, 2024
  • Siemens expects to achieve significant cost and revenue synergies, with the transaction being EPS (pre-PPA) accretive by year two post-closing

Impact on Altair

The acquisition of Altair by Siemens is set to bring significant changes to Altair's operations and management. Upon completion of the transaction, Altair’s common stock will no longer be listed on any public stock exchange, marking a shift from its previous public company status. Siemens plans to integrate Altair’s capabilities with its Xcelerator platform, creating a comprehensive AI-powered design and simulation portfolio. This integration is expected to streamline operations and enhance the technological synergy between the two companies, ultimately benefiting both Siemens and Altair's existing customer base.

In terms of product offerings and services, the acquisition aims to combine Altair’s strengths in simulation, data science, and high-performance computing with Siemens' expertise in mechanical and electronic design automation. This merger is anticipated to enhance Siemens' Digital Twin offerings and accelerate digital and sustainability transformations for their customers. While specific employee reactions are not detailed, the strategic fit and complementary nature of the two companies' portfolios have been positively highlighted by key executives. Customer reactions remain cautiously optimistic, with the potential for improved service offerings and accelerated design iterations.

For founders considering business transitions, tools like Sunset can assist in managing such processes compliantly, ensuring a smooth and efficient transition.