Synopsys to buy Ansys in $35bn deal

Under the terms of the agreement, Ansys shareholders will receive $197.00 in cash and 0.3450 shares of Synopsys common stock for each of their shares.

Synopsys said that bringing together its pioneering semiconductor electronic design automation (EDA) with Ansys' broad simulation and analysis portfolio "will create a leader in silicon to systems design solutions".

The combined company is expected to generate substantial and sustained free cash flow, Synopsys said, which will enable rapid de-leveraging to less than 2x debt to adjusted EBITDA within two years after the deal closes, with a long-term leverage target of less than 1x.

The combined company also expects to achieve around $400m of run-rate cost synergies by year three after closing and $400m of run-rate revenue synergies by year four, growing to more than approximately $1bn annually in the longer-term.

Synopsys chief executive and president Sassine Ghazi said: "The megatrends of AI, silicon proliferation and software-defined systems are requiring more compute performance and efficiency in the face of growing, systemic complexity.

"Bringing together Synopsys' industry-leading EDA solutions with Ansys' world-class simulation and analysis capabilities will enable us to deliver a holistic, powerful and seamlessly integrated silicon to systems approach to innovation to help maximise the capabilities of technology R&D teams across a broad range of industries."