SAN JOSE, Calif. - Cadence Design (NASDAQ:CDNS) Systems, Inc. (NASDAQ: CDNS), a leader in electronic systems design, announced today that it has finalized the acquisition of BETA CAE (NYSE:CAE) Systems International AG, a company known for its engineering simulation solutions. This acquisition is part of Cadence's strategy to enhance its Intelligent System Design™ offerings by integrating BETA CAE's multiphysics system analysis tools into its portfolio.
The merger is expected to broaden Cadence's reach in various industries, with BETA CAE having a notable presence in the automotive sector as well as in aerospace, industrial, and healthcare markets. BETA CAE's addition is projected to contribute approximately $40 million to Cadence's 2024 revenue, based on BETA CAE's annual revenue of about $90 million.
Financially, the transaction is anticipated to be 12 cents dilutive to Cadence's 2024 earnings per share on a non-GAAP basis, but it is expected to become accretive in 2025. These projections align with Cadence's long-term financial strategy, which includes using its free cash flow for debt repayment and share repurchases.
Cadence, with over three decades of experience in computational software, is recognized for its software, hardware, and IP that transform design concepts into reality.
Its customer base includes some of the world's most innovative companies that create electronic products across various dynamic market applications such as consumer electronics, hyperscale computing, 5G communications, and more. Fortune magazine has consistently ranked Cadence as one of the 100 Best Companies to Work For over the past decade.
This news is based on a press release statement and contains forward-looking statements regarding the expected benefits and financial impact of the acquisition, which are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those anticipated.
Cadence's commitment to growth in the multiphysics space is underscored by this strategic move, which aims to provide customers with a more comprehensive suite of analysis tools, thereby unlocking new market opportunities and fostering innovation in system design.
InvestingPro Insights
In the wake of Cadence Design Systems, Inc.'s (NASDAQ: CDNS) recent acquisition of BETA CAE Systems International AG, investors and industry watchers are keenly observing the financial metrics that may influence the company's performance. According to InvestingPro data, Cadence boasts a robust Market Cap of approximately $77.91B USD, underlining its significant position in the market.
Notably, Cadence's Gross Profit Margin for the last twelve months as of Q1 2024 stands at an impressive 89.31%, which is a testament to the company's ability to maintain high profitability in its operations. This aligns with one of the InvestingPro Tips highlighting Cadence's impressive gross profit margins. Furthermore, the Revenue Growth for the same period indicates a solid increase of 10.75%, showcasing the company's capacity for sustaining growth.
InvestingPro Tips also point out that Cadence is trading at a high Price / Book multiple of 21.84 as of Q1 2024. While this might suggest a premium valuation, it is important to consider the company's strategic initiatives, such as the recent acquisition, which could justify the current market expectations. Investors interested in a deeper dive into Cadence's financials can explore additional tips on InvestingPro, with a total of 16 tips available, providing a comprehensive analysis that could guide investment decisions.
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