Siemens to buy engineering simulation software supplier CD-adapco

Siemens and CD-adapco have entered into a stock purchase agreement for the acquisition of CD-adapco by Siemens, the companies announced on Monday.

The purchase price is $970 million. 

CD-adapco is a global engineering simulation company with software solutions covering a wide range of engineering disciplines including fluid dynamics (CFD), solid mechanics (CSM), heat transfer, particle dynamics, reactant flow, electrochemistry, acoustics and rheology. 

Last fiscal year, CD-adapco had over 900 employees and revenue of close to $200 million with software-typical double-digit margins. 

On average, CD-adapco increased its revenue at constant currencies by more than 12% annually over the past three fiscal years, officials said. Siemens expects this business to continue to experience strong growth in the future.

 

“As part of its Vision 2020, Siemens is acquiring CD-adapco and sharpening its focus on growth in digital business and expanding its portfolio in the area of industry software," said Klaus Helmrich, a managing board member at Siemens. "Simulation software is key to enabling customers to bring better products to the market faster and at less cost. 

"With CD-adapco, we’re acquiring an established technology leader that will allow us to supplement our world-class industry software portfolio and deliver on our strategy to further expand our digital enterprise portfolio," he added.

CD-adapco is a global engineering simulation company with a unique vision for multidisciplinary design eXploration (MDX). Engineering simulation provides the most reliable flow of information into the design process, which drives innovation and lowers product development costs, the company says.

CD-adapco simulation tools, led by the flagship product STAR-CCM+, allow engineers to discover better designs, faster. CD-adapco now has over 3,200 customers worldwide, and its software is currently used by 14 of the 15 largest carmakers, by all of the top 10 suppliers to the aerospace industry and by nine of the 10 largest manufacturers in the energy and marine sectors.

“I am pleased for both the employees and the customers of CD-adapco," said CD-adapco CEO Sharron MacDonald. "The opportunities that come with the acquisition by Siemens are endless. The vision of our founders will be realized in the integration of these world-class engineering and manufacturing technologies and a business strategy that will allow engineering simulation to impact more products and companies than ever before.”

CD-adapco is headquartered in Melville, New York, and has 40 locations worldwide. Siemens expects synergy impact on EBIT to be in the mid-double-digit million range within five years of closing, mainly from revenue. Closing of the transaction is subject to customary conditions and is expected in the second half of fiscal year 2016.

CD-adapco will be integrated into the PLM software business of Siemens’ digital factory (DF) Division. DF is the industry leader in automation technology and a leading provider of Product Lifecycle Management (PLM) software. 

“By adding advanced engineering simulation tools such as CFD to our portfolio and experienced experts in the field to our organization, we’re greatly enhancing our core competencies for model-based simulation that creates a very precise digital twin of the product,” said Anton Huber, CEO of the digital factory division at Siemens.