Cadence's €2.7B Acquisition of Hexagon D&E (MSC Software) - Accelerating Intelligent System Design and Reshaping the EDA&CAE Competitive Landscape

Cadence's Strategic Acquisition of Hexagon D&E: Accelerating Intelligent System Design Amidst EDA & CAE Market Shifts

Cadence Design Systems, Inc. as a leader in computational software, recently announced its strategic acquisition of Hexagon's Design & Engineering (D&E) business for approximately €2.7bn (70% cash, 30% equity). The core asset of this acquisition is the industry-renowned MSC Software. This acquisition marks a crucial step for Cadence to accelerate its Intelligent System Design strategy, aiming to expand and enhance its multi-physics simulation capabilities by integrating Hexagon D&E's leading technologies in structural and multi-body dynamics simulation. This move not only actively responds to the growing demand for system design and analysis in the context of electro-mechanical hyper-convergence but also signals a further deepening of the Electronic Design Automation (EDA) and Computer-Aided Engineering (CAE) convergence trend in the global industrial software market, poised to reshape the industry's competitive landscape.

Transaction Overview: Cadence and Hexagon's Strategic Collaboration

This transaction represents a significant merger and acquisition between Electronic Design Automation (EDA) giant Cadence and Swedish industrial technology company Hexagon, aimed at deepening both parties' positions in their respective core strategic areas and adapting to the rapidly evolving engineering simulation market.

• Acquiring and Target Entities: The acquirer is Cadence Design Systems, Inc. (NASDAQ: CDNS), listed on the Nasdaq Global Select Market. The target entity is Hexagon Smart Solutions AB, a subsidiary of Hexagon, with the transaction encompassing Hexagon's Design & Engineering (D&E) business, which includes the previously acquired renowned simulation software MSC Software and most of its subsidiaries and related assets.
• Transaction Price and Payment Method: The total consideration is approximately €2.7bn (approximately $3.16bn). Of this, 70% (approximately €1.89bn) will be paid in cash, funded by Cadence's existing cash and debt facilities; the remaining 30% (approximately €810M) will be paid to Hexagon in the form of newly issued Cadence common stock.
• Transaction Timeline and Conditions: The transaction is expected to close in Q1 2026, subject to customary closing conditions and regulatory approvals, including the expiration or termination of the applicable waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976 and other antitrust and foreign direct investment laws in relevant jurisdictions. The agreement includes customary termination rights, where Cadence may be required to pay a reverse termination fee of up to €175M (approximately $175M) if the necessary regulatory approvals are not obtained.

Hexagon AB Brand Image

Source: Hexagon