Engineering software firm Altair explores sale, sources say
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 firmAnsys 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 hadjumped about 55% over the past year till yesterday's close and the company commandsa 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, FordMotor F.N and International Paper IP.N.
Reporting by Anirban Sen and Milana Vinn in New York
Editing by Nick Zieminski
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