Siemens AG has secured a $10.5 billion bridge loan to finance its acquisition of Altair Engineering Inc., marking its largest-ever software company acquisition. The loan was fully underwritten by Goldman Sachs and is slated for syndication among more than ten of Siemens’ partner banks.
The acquisition agreement, announced on October 30, 2024 and covered here, involves Siemens purchasing Altair at $113 per share, representing an 18.7% premium over Altair’s closing price on October 21. The acquisition price represents 14 times the annual revenue Altair was projected to make in all of 2025.
“Starting in fiscal 2025, we will take Siemens to the next level of value creation,’ said Siemens CEO Roland Busch in the company’s Q4 financial report. “We will continue to invest in R&D and M&A to secure faster growth based on our technological strengths and ability to scale across industries. Our planned acquisition of Altair reinforces our leadership in industrial software and AI.”
Siemens’ strategy is to integrate hardware and software solutions to bridge the real and digital worlds.
Altair, a Detroit-area company known almost entirely for its simulation software is big in the automotive sector, but also has customers in other manufacturing industries, consumer goods, and energy.
But Siemens getting a loan was a bit of a surprise to us. It was a change of plans for Siemens, which initially announced it had all the means to buy Altair without assistance.
“The acquisition will be fully cash-financed from Siemens’ existing resources and its capacity to fully finance the transaction based on Siemens’ strong balance sheet,” reads the October 30 announcement of the acquisition.
Keeping the money in the bank lets Siemens make more big acquisitions, which the company seems eager to do.
“This was definitely not the last acquisition we make in the area of software,” said managing board member Cedrik Neike to German newspaper Handelsblatt in an interview published on Friday. “We have the financial strength to be able to do further deals.”
