Cadence Design Systems, a leading software firm based in San Jose, California, has announced its acquisition of analysis platform provider BETA CAE Systems International AG for $1.24 billion, a move aimed at bolstering its offerings in the industry.
The deal, revealed on Tuesday, will see Cadence paying 60 percent of the total consideration in cash, with the remaining 40 percent distributed through the issuance of Cadence common stock to current shareholders of BETA CAE, Reuter news report said.
To finance a portion of the $744 million cash component of the agreement, Cadence intends to secure debt, with plans to utilize the free cash flow generated by its ongoing operations to repay the borrowed funds. Despite the significant financial transaction, Cadence’s shares experienced a marginal premarket decline of 1.5 percent, indicating subdued initial market reaction to the news.
The acquisition is slated to be finalized in the second quarter of the year, with Cadence anticipating that BETA CAE will contribute approximately $40 million to its revenue in 2024, as outlined in the company’s statement. This strategic move underscores Cadence’s commitment to expanding its capabilities and market presence within the software industry.
