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Ansys headquarters in Canonsburg. Sunnyvale, Calif.-based Synopsis announced Tuesday it would buy the software company Ansys for $35 billion in a cash and stock deal.
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After weeks of speculation, Canonsburg-based Ansys to be bought by Synopsys for $35 billion

Photo courtesy of Ansys

After weeks of speculation, Canonsburg-based Ansys to be bought by Synopsys for $35 billion

Ansys’ space simulations helped train Astrobotic, the North Side startup whose first lunar lander is hurtling back to Earth

Synopsys announced Tuesday it would buy the Canonsburg-based software company Ansys for $35 billion in a cash and stock deal that confirms weeks of speculation and marks the second major acquisition of a Pittsburgh-area giant in two months.

The joint enterprise will improve silicon designs for electronics like semiconductors, the companies said in the announcement. Synopsys is an S&P 500 company headquartered in Sunnyvale, Calif.

Under the terms of the agreement, Ansys shareholders will receive $197 in cash and 0.35 shares of Synopsys common stock for each Ansys share, for a total value of about $35 billion, based on the closing price of Synopsys common stock on Dec. 21, 2023. The deal, set to close in the first half of 2025 pending regulatory signoff and approval by Ansys shareholders, was a 29% premium over Ansys' closing stock price on Dec. 21.

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Synopsys is already a leader in semiconductor design but is interested in Ansys’ simulation software, which allows companies to test the physics of their design in a virtual environment. Ansys’ space simulations helped train Astrobotic, the North Side startup whose first lunar lander is damaged and currently hurtling back to Earth.

An Astrobotic Technology staff member makes an adjustment to check the weight of their Peregrine Lander lunar landing vehicle at the robotics company headquarters on the North Side Thursday, August 31, 2023.
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"This is the logical next step for our successful, seven-year partnership with Ansys,” Synopsys President and Chief Executive Sassine Ghazi said in a statement. “The megatrends of AI, silicon proliferation and software-defined systems are requiring more compute performance and efficiency in the face of growing, systemic complexity.”

Combing the two systems will “maximize the capabilities of technology R&D teams across a broad range of industries," she said.

Ansys President and Chief Executive Ajei Gopal also praised the deal, noting that Ansys’ innovation over the past 50 years has been “limited only by imagination.”

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“By joining forces with Synopsys, we will amplify our joint efforts to drive new levels of customer innovation," he said. "This transformative combination brings together each company's highly complementary capabilities to meet the evolving needs of today's engineers and give them unprecedented insight into the performance of their products.”

Both executives said the partnership will benefit customers, shareholders and employees.

“I am proud of all that our employees do every day to make Ansys and our customers successful and look forward to the combined company achieving even greater heights in this next chapter,” Mr. Gopal said.

Reuters first reported the Synopsys bid in December. The outlet noted Tuesday that the Ansys deal is "the biggest acquisition in the technology sector since chipmaker Broadcom took over software maker VMware last November in a $69 billion deal."

It’s also one of the largest — if not the largest ever — deals for the Pittsburgh region.

H.J. Heinz Co. sold itself to an investment group in 2013 for $28 billion, and before that, Bank of New York in 2006 paid $16.5 billion for Mellon Financial to form BNY Mellon.

In December, U.S. Steel announced plans to sell itself to Japan’s Nippon Steel Corp. for $14.9 billion.

Synopsys said the Ansys deal came at an opportune time for both companies.

But it also came as both navigate high-level leadership changes — Synopsys’ former CEO moved to an executive chairman role in December, and Ansys’ chief financial officer plans to leave in the coming months.

Some speculated that reaching a deal in the midst of that turnover highlighted the commercial appeal of Ansys' software. R. Ravi, a business professor at Carnegie Mellon University, said the software is “hugely important for modern tech and science.”

Ansys’ product is “some of the best simulation software in the world,” he said. It replaces the laborious and expensive real-world tests that can slow down development processes. Adding those capabilities to chip design will help Synopsys capitalize on a growing sector that is “very, very hot,” Mr. Ravi said.

And while some jobs could be impacted in the short term by the transition, Mr. Ravi expects the deal to eventually stir growth.

“The strong ties to a much larger technical ecosystem will eventually help attract more and different types of jobs,” he said. The joint venture will also be a “very attractive” employer for business and tech graduates from CMU, he said.

Ansys has more than 6,000 employees. About 12%, or 700, work in Western Pennsylvania, a spokesperson said.

Synopsys did not say directly how the deal would impact jobs in the region.

In a statement to the Post-Gazette, Synopsys said “this combination is focused on growth and creating a larger, more diversified, and stronger combined company that can create more opportunities for our talented teams.”

The deal showcases both companies’ strengths and their ability to work well together, said Laurie Barkman, an adjunct business professor at CMU who advises mergers and acquisitions through her private practice, Stony Hill Advisors.

“It's kind of like dating,” she said. “If these companies were people, we'd say that they dated for seven years before making a decision to get married.”

“It’s good to see that strategic business relationships can evolve over time,” she added.

While details on the deal’s impact to regional workforce remained hazy, Ms. Barkman celebrated the potential.

“I think it's a massive opportunity,” she said. “This is a huge global market — over $600 billion for the semiconductor marketplace — and this provides a lot of pathways for growth.”

Evan Robinson-Johnson: ejohnson@post-gazette.com and @sightsonwheels 

First Published: January 16, 2024, 3:30 p.m.
Updated: January 18, 2024, 3:21 p.m.

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Ansys headquarters in Canonsburg. Sunnyvale, Calif.-based Synopsis announced Tuesday it would buy the software company Ansys for $35 billion in a cash and stock deal.  (Photo courtesy of Ansys)
Photo courtesy of Ansys
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