SAN JOSE, CA – Cadence Design Systems will buy BETA CAE Systems International AG, a maker of software for analyzing car and jet engine designs, for $1.24 billion in cash and stock, the company announced.

Cadence said it will pay for the acquisition with around $744 million in cash and the rest in stock, and while it will take on debt to pay for the deal, it will pay that down with cash generated from operations.

BETA CAE's software is widely used to analyze designs in automotive and aerospace industries, with customers such as Honda, General Motors and Lockheed Martin. Over the last several years, Cadence has expanded its system analysis portfolio to build out a comprehensive multiphysics platform including electromagnetics, electrothermal and computational fluid dynamics solutions, and with BETA CAE, Cadence will enter structural analysis, the largest system analysis segment, the company said.

"Cadence entered the multiphysics space several years ago through organic innovation and acquisitions. This strategic acquisition reaffirms our commitment to continued growth in this critical domain," said Anirudh Devgan, president and CEO, Cadence. "Combining our computational software expertise with BETA CAE’s rich technology and talent will enable us to offer a more comprehensive portfolio to customers, while opening significant new opportunities for Cadence by tapping into the structural analysis segment. These solutions are particularly important in automotive, where convergence of electrical and mechanical designs is further driven by an increasing shift towards electric vehicles, requiring deeper design team collaboration in integrated workflows."

"For more than two decades we’ve led the evolution of engineering simulation, first by establishing our reputation in the land mobility sector, and then successfully expanding to broad deployments across aerospace, defense, biomechanics, electronics, energy and other industries," said Panagiotis Kouvrakis, chairman of BETA CAE. "We are very excited to join the Cadence team and are looking forward to advancing success through our shared values and passion for innovation and engineering, and our unwavering commitment to customers and partners."

The transaction is expected to close in the second quarter of the year and Cadence expects BETA CAE to contribute about $40 million to its 2024 revenue, the company said.