Siemens strengthens leadership in industrial software and AI with acquisition of Altair Engineering

MUNICH, Oct. 30, 2024 — (PRNewswire) — Siemens has signed an agreement to acquire Altair Engineering Inc., a leading provider of software in the industrial simulation and analysis market. Altair shareholders will receive USD 113 per share, representing an enterprise value of approximately USD 10 billion. The offer price represents a 19% premium to Altair's unaffected closing price on October 21, 2024, the last trading day prior to media reports regarding a possible transaction. With this acquisition Siemens strengthens its position as a leading technology company and its leadership in industrial software.

"Acquiring Altair marks a significant milestone for Siemens. This strategic investment aligns with our commitment to accelerate the digital and sustainability transformations of our customers by combining the real and digital worlds. The addition of Altair's capabilities in simulation, high performance computing, data science, and artificial intelligence together with Siemens Xcelerator will create the world's most complete AI-powered design and simulation portfolio," said Roland Busch, President and CEO of Siemens AG. "It is a logical next step: we have been building our leadership in industrial software for the last 15 years, most recently, democratizing the benefits of data and AI for entire industries."

"The acquisition of Altair is highly synergistic, underpinning Siemens' stringent capital allocation, balancing investments and shareholder returns on the basis of a strong balance sheet. The transaction is expected to be EPS accretive two years post-closing," said Ralf P. Thomas, CFO of Siemens AG.

"This acquisition represents the culmination of nearly 40 years in which Altair has grown from a startup in Detroit to a world-class software and technology company. We have added thousands of customers globally in manufacturing, life sciences, energy and financial services, and built an amazing workforce, and innovative culture," said James Scapa, Altair's founder and CEO. "We believe this combination of two strongly complementary leaders in the engineering software space brings together Altair's broad portfolio in simulation, data science, and HPC with Siemens' strong position in mechanical and EDA design. Siemens' outstanding technology, strategic customer relationships, and honest, technical culture is an excellent fit for Altair to continue its journey driving innovation with computational intelligence."

By adding Altair's highly complementary simulation portfolio, with strength in mechanical and electromagnetic capabilities, we are enhancing our comprehensive Digital Twin to deliver a full-suite, physics-based, simulation portfolio as part of Siemens Xcelerator. Altair's data science and AI-powered simulation capabilities allow anyone, from engineers to generalists, to access simulation expertise to decrease time-to-market and accelerate design iterations. Additionally, Altair's data science capabilities will unlock Siemens' industrial domain expertise in product lifecycle and manufacturing processes.

Significant synergies and EPS accretive
The transaction will strongly increase Siemens' digital business revenue by +8%, adding EUR ~600 million to Siemens' digital business revenue of EUR 7.3 billion as reported in fiscal year 2023. Siemens expects to achieve significant revenue synergies especially from cross-selling of the highly complementary portfolios and from providing Altair full access to Siemens's global footprint and global industrial enterprise and customer base with a revenue impact of more than USD 500 million p.a. mid-term growing to more than USD 1.0 billion p.a. long-term. Moreover, Siemens aims to achieve cost synergies on a short-term basis, with an EBITDA impact of more than USD 150 million p.a. by year two post-closing.

The transaction is expected to be EPS (pre-PPA) accretive by year two post-closing. 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, as underlined by its exceptional rating, which Siemens is committed to maintain.
Preemptive deleveraging is supported by significant cash proceeds from the already closed Innomotics divestment. In addition, Siemens has substantial financing potential from the sale of shares in listed entities. Closing of the transaction is subject to customary conditions and is expected within the second half of calendar year 2025.

Altair Engineering is a global leader in computational science and artificial intelligence (AI) that provides software and cloud solutions in Simulation and Analysis, Data Science and AI, and High-Performance Computing, enabling organizations across all industries to compete more effectively and drive smarter decisions in an increasingly connected world. Founded in 1985, Altair Engineering Inc. went public in 2017 (Nasdaq) and is headquartered in Troy, Michigan (USA). Out of its more than 3,500 employees, approximately 1,400 employees work in R&D.

This press release is available at: https://sie.ag/4gjWom

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Siemens AG (Berlin and Munich) is a leading technology company focused on industry, infrastructure, mobility, and healthcare. The company's purpose is to create technology to transform the everyday, for everyone. By combining the real and the digital worlds, Siemens empowers customers to accelerate their digital and sustainability transformations, making factories more efficient, cities more livable, and transportation more sustainable. Siemens also owns a majority stake in the publicly listed company, Siemens Healthineers, a leading global medical technology provider shaping the future of healthcare.
In fiscal 2023, which ended on September 30, 2023, the Siemens Group generated revenue of €74.9 billion and net income of €8.5 billion. As of September 30, 2023, the company employed around 305,000 people worldwide on the basis of continuing operations. Further information is available on the Internet at www.siemens.com.

Notes and forward-looking statements
This document contains statements related to our future business and financial performance and future events or developments involving Siemens that may constitute forward-looking statements. These statements may be identified by words such as "expect," "look forward to," "anticipate," "intend," "plan," "believe," "seek," "estimate," "will," "project" or words of similar meaning. We may also make forward-looking statements in other reports, in prospectuses, in presentations, in material delivered to shareholders and in press releases. In addition, our representatives may from time to time make oral forward-looking statements. Such statements are based on the current expectations and certain assumptions of Siemens' management, of which many are beyond Siemens' control. These are subject to a number of risks, uncertainties and factors, including, but not limited to those described in disclosures, in particular in the chapter Report on expected developments and associated material opportunities and risks in the Combined Management Report of the Siemens Report (siemens.com/siemensreport), and in the Interim Group Management Report of the Half-year Financial Report (provided that it is already available for the current reporting year), which should be read in conjunction with the Combined Management Report. Should one or more of these risks or uncertainties materialize, should decisions, assessments or requirements of regulatory authorities deviate from our expectations, should events of force majeure, such as pandemics, unrest or acts of war, occur or should underlying expectations including future events occur at a later date or not at all or assumptions prove incorrect, actual results, performance or achievements of Siemens may (negatively or positively) vary materially from those described explicitly or implicitly in the relevant forward-looking statement. Siemens neither intends, nor assumes any obligation, to update or revise these forward-looking statements in light of developments which differ from those anticipated. This document includes – in the applicable financial reporting framework not clearly defined – supplemental financial measures that are or may be alternative performance measures (non-GAAP-measures). These supplemental financial measures should not be viewed in isolation or as alternatives to measures of Siemens' net assets and financial positions or results of operations as presented in accordance with the applicable financial reporting framework in its Consolidated Financial Statements. Other companies that report or describe similarly titled alternative performance measures may calculate them differently. Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

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