Synopsys is ready to hit the ground running when the chip design software firm closes its transformational acquisition of Ansys, a Synopsys executive says. Synopsys stock has been in a holding pattern ahead of the deal closing.
The acquisition will fulfill Synopsys' goal of becoming a true silicon-to-systems design technology provider, Synopsys Chief Financial Officer Shelagh Glaser said in an interview at CES 2025 earlier this month.
"We talk a lot about silicon to systems," she said. "Synopsys has the digital design environment and Ansys has the multi-physics environment. And those are two different design environments and we want to bring those together."
Synopsys is on track to close the Ansys purchase in the first half of this year, Glaser said. It announced the $35 billion deal in January 2024.
The size of the acquisition and the global nature of the companies involved necessitated the long regulatory review period.
The two companies are very complementary, Glaser said. But they are divesting two business units with overlap to help secure approval of the deal. Ansys plans to sell its PowerArtist business to Keysight Technologies, while Synopsys plans to sell its Optical Solutions business to Keysight.
SNPS Stock In Consolidation Pattern
Synopsys stock is in a 49-week consolidation pattern with a buy point of 629.38, according to IBD MarketSurge charts. On the stock market today, Synopsys stock rose 3% to close at 526.12
Synopsys and Ansys share a number of customers and have had a partnership since 2017, Glaser said. "We've had a loosely coupled solution for customers," she said.
Now Synopsys wants to integrate those product offerings. So, an automotive manufacturer can design the computer chips for its vehicles at the same time it is working on the overall product.
"Our expectation is that within one to two design cycles we will be able to integrate their engines into our engines," Glaser said. "And a design cycle is about nine months. In the scheme of things, it will happen relatively quickly."
Meanwhile, the two companies have been sharing their methodologies and approaches ahead of the combination.
"The good part about a long regulatory process is that we've been able to have quite a bit of work on the integration planning," Glaser said. "Obviously we can't share data with each other but we can share process information and things like that."
Synopsys wants to be ready for the combined company on day one, she said.
Synopsys Stock Is A Long-Term Leader
Mizuho Securities rates Synopsys stock as one of its "top picks" for 2025.
Synopsys is a key beneficiary of the generative AI infrastructure buildout, Mizuho analyst Siti Panigrahi said in a client note.
"With a sticky customer base and a solid competitive moat in a mission-critical semis design industry, we see SNPS as a core holding in a software portfolio," Panigrahi said.
Plus, the pending Ansys acquisition is an "accretive and highly strategic" deal, he said.
Synopsys stock is in the IBD Long-Term Leaders Portfolio.
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