Synopsys, Ansys in merger talks: WSJ
Synopsys (SNPS) is in talk with Ansys (ANSS) about acquiring the company, according to a report from The Wall Street Journal. The Journal reports that the design-software companies could reach a deal in early 2024, though the outlet's source cautions there is potential for the talks to fall apart. Synopsys declined to comment on "the rumor and speculation."
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Video Transcript
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JOSH LIPTON: Synopsys reportedly is in talks to acquire Ansys, that's according to the "Wall Street Journal." Ansys currently has a market value of about $30 billion The deal with Synopsys could be struck early in 2024. So this one is interesting, again, Jared--
JARED BLIKRE: Yes.
JOSH LIPTON: --coming from the Journal. It would mean, if it happens, a big new design software giant. Ansys market about $30 billion did per the Journal about $2 billion in 2022, in terms of timeline could happen as early as next year.
So some pretty big deal making perhaps to kick off the new year. We just spoke with Teneo's CEO on the show. And they surveyed execs and found that most do expect a pickup in M&A next year.
On the one hand, we're talking about how it's still kind of a relatively tough regulatory backdrop, Lina Khan, the FTC. On the other hand, financing costs coming down. So maybe the first signs here of what they were surveying.
Synopsys, by the way, strong run this year, up about 70%. Analysts are fans. 14 buys, 2 holds, 1 sell. Its customers don't hurt names, like NVIDIA and AMD among others
JARED BLIKRE: Yeah, it's a fairly big company too. And by the way, just this story broke earlier today. We didn't know the suitor who was going to buy Ansys, but there was a Bloomberg report that was circulating this. So we actually have analysts' commentary from earlier in the day who did not have the privilege of knowing who the suitor would be.
But here's Bloomberg Intelligence saying, with the largest market share of the simulation software market at 42%, Ansys is an attractive M&A target. KeyBanc, which holds it a sector weight, analyst is saying that Synopsys may be the most-- Synopsys, so that's the eventual suitor, just guessing there, may make the most strategic sense in terms of a potential buyer of Ansys given the two companies have shared opportunities and overlap in 3D IC. However, Synopsys may not have the cash, means for the $28 billion, because this is not a cheap company.
If we go to the Wi-Fi interactive, I'll show you Synopsys right here. This has a market cap of $80 billion. I'm circling that right now. Well, you move down to Ansys, $31 billion. That's a big difference.
JOSH LIPTON: Yeah, it sure is. And Synopsys, by the way, we should mention, declined to comment on the rumor and speculation. But the story, of course, we will continue to cover here.
