Engineering software firm Altair explores sale, sources say

Altair Engineering

22/10/2024 19:43

(Adds more background on Altair)
    By Anirban Sen and Milana Vinn
       NEW YORK, Oct 22 (Reuters) - Altair Engineering
 ALTR.O , an engineering software maker with a market value of
nearly $9 billion, is exploring a sale after receiving
acquisition interest, three people familiar with the matter said
on Tuesday. 
    Troy, Michigan-based Altair is working with investment
bankers to gauge interest from potential suitors, the sources
said, requesting anonymity as the discussions are confidential. 
    If the talks are successful, a deal could be signed in
coming weeks, one of the sources said, cautioning that a
transaction is not guaranteed and Altair may choose to stay
independent. 
    Altair's shares jumped more than 14% on Tuesday after
Reuters reported on the company's sale talks. 
    Potential bidders include rival design software makers such
as PTC  PTC.O  and Cadence Design Systems  CDNS.O , the sources
said. Reuters could not determine whether PTC and Cadence have
approached Altair.
    Altair and Cadence did not immediately respond to requests
for comment. PTC declined to comment. 
    Engineering software companies have become attractive
acquisition targets as investors bet on companies that could
benefit from the boom in artificial intelligence. 
    In January, chip-design company Synopsys  SNPS.O  agreed to
buy design software firm Ansys in a deal worth about $35
billion. Earlier this year, Bentley Systems  BSY.O , which
competes with Altair, held talks with Schneider Electric
 SCHN.PA  but a deal did not materialize. 
    Founded in 1985, Altair makes a range of software solutions,
including what is referred to as computer-aided engineering
software that helps engineers design, analyze and manufacture
products. Its simulation software helps predict how products
would work in the real world. 
        Altair's founder James Scapa, who serves as the
company's chairman and CEO, controls 53.42% of the voting stock
through dual-class shares, according to recent regulatory
filings. 
  
    Shares of Altair had jumped about 55% over the past year
till yesterday's close and the company commands a higher
multiple compared to its peers. Altair trades at roughly 46
times earnings before interest, taxes, depreciation and
amortization (EBITDA), compared to roughly 30 times for Bentley
Systems  BSY.O , according to LSEG data. 
    In its most recent quarterly earnings, Altair posted an 8%
rise in software revenue to $135.4 million, at the higher end of
its guidance. 
    Altair works with several large corporations including
Hewlett-Packard Enterprise  HPE.N , Ford Motor  F.N  and
International Paper  IP.N . 

 (Reporting by Anirban Sen and Milana Vinn in New York
Editing by Nick Zieminski)
 ((Anirban.Sen@thomsonreuters.com; Twitter: @asenjourno; Reuters
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