ANSYS Inc., a global innovator of simulation software and technologies designed to optimize product development processes, and Ansoft Corp., a global provider of Electronic Design Automation (EDA) software, announced that they signed a definitive agreement whereby ANSYS will acquire Ansoft for a purchase price of approximately $832 M in a mix of cash and ANSYS common stock. The strategic, complementary business combination of ANSYS and Ansoft will create the leading provider of 'best-in-class' simulation capabilities, with combined trailing 12-month revenues of $485 M. When completed, ANSYS currently anticipates that the transaction will be modestly accretive to non-GAAP earnings per share in its first full year of combined operations.
Under the terms of the definitive agreement, which was unanimously approved by the Boards of Directors of both companies, Ansoft stockholders will receive $16.25 in cash and 0.431882 shares of ANSYS common stock for each outstanding Ansoft share. Based on the 10-day trailing average closing price of ANSYS common stock, the implied value is $32.50 per Ansoft share. ANSYS will issue an aggregate of approximately 11.1 million shares of its common stock and pay an aggregate of approximately $416 M in cash in the transaction. ANSYS intends to fund the cash portion of the transaction with approximately $70 M of cash on-hand from the combined organization and approximately $346 M from the proceeds of a $450 M unsecured senior term loan credit facility. ANSYS' current lender, Bank of America, N.A., has committed to fully underwriting the credit facility and Banc of America Securities LLC has agreed to act as lead arranger. The pricing of the senior credit facility is tier based with limited market flexibility on yields and structure to facilitate its syndication. /p>
The transaction, currently anticipated to close in the second calendar quarter of 2008, is subject to customary closing conditions, regulatory approvals and approval by the Ansoft stockholders. In connection with the execution of the definitive agreement, certain Ansoft stockholders, who collectively beneficially own approximately 16 percent of Ansoft, entered into voting agreements agreeing to vote for the proposed transaction. Upon the closing of the transaction, Ansoft stockholders will own approximately 12 percent of the combined company on a pro forma basis. After the closing, Ansoft will become a wholly-owned subsidiary of ANSYS and Ansoft common stock will cease trading on Nasdaq.
Ansoft is a leading developer of high performance EDA software. The software is based on more than 25 years of research and development by world-renowned experts in electromagnetics, circuit and system simulation. Engineers use Ansoft products to simulate high performance electronics designs found in mobile communication and internet devices, broadband networking components and systems, integrated circuits, printed circuit boards and electromechanical systems. The company's products are used by blue chip companies as well as small and medium sized enterprises around the world.
The acquisition of Ansoft is ANSYS's first foray into the broader EDA software industry and will enhance the breadth, functionality, usability and interoperability of the combined ANSYS portfolio of engineering simulation solutions. The combination is expected to increase operational efficiency and lower design and engineering costs for customers, and accelerate development and delivery of new and innovative products to the marketplace. The complementary combination of Ansoft's and ANSYS's software products and services is expected to give ANSYS one of the most complete, independent engineering simulation software offerings in the industry, reaffirming and strengthening ANSYS's commitment to open interface and flexible simulation solutions that are primarily driven by customer demand, flexibility and choice. With over 40 direct sales offices and 21 development centers on three continents, the combined company will employ approximately 1,700 people.
"We are very excited about the state-of-the-art technologies that Ansoft adds to ANSYS's simulation capabilities," said James E. Cashman III, president and chief executive officer of ANSYS. "Both companies have a strong commitment to their customers and employees, and share a passion for the development of innovative products and services and a history of world-class execution. This combination will further strengthen these values and will allow us to better serve our customers by accelerating the delivery of comprehensive, customer-driven engineering simulation solutions and by enabling us to provide high quality support throughout the world. We see this as an opportunity to add highly complementary physics that address the convergence of mechanical and electrical engineering product design and development. We are also excited about bringing two great Pittsburgh-based companies together to create an exciting opportunity for aspiring engineers, computer scientists and professionals to join us in our mission to democratize the use of simulation across the globe."
"This merger brings together two great companies with a shared vision and strong engineering focus," said Zoltan J. Cendes, the founder, chairman of the board and chief technology officer of Ansoft. "The combination of our R&D teams, complementary technological strengths and our commitment to quality will enhance our ability to deliver comprehensive, innovative, world-class simulation software technologies that customers demand." In conjunction with this transaction, Cendes will join ANSYS' Board of Directors following the closing of the transaction.
The two Pittsburgh-based companies are developing integration plans that leverage and build on the cultural similarities and the best practices from each team. ANSYS will provide additional details relative to the acquisition and integration activities subsequent to the closing of the transaction.