The takeover carousel is spinning faster again. Hardly a day goes by without a billion-dollar deal making headlines. Yesterday, US technology company Cadence Design Systems announced a billion-dollar offer for Swiss company BETA CAE. The acquisition aims to expand the value chain and tap into new market potential.

Cadence Design Systems: A key player in the semiconductor industry. Cadence Design Systems offers advanced technological solutions for the design and development of electronic systems. The products are diverse and are designed to support customers in all phases of the system design pipeline, from planning and design to testing and verifying finished products.

With Cadence solutions, it is possible to design extremely small and complex integrated circuits and electronic devices. In turn, Cadence’s products help customers save on development costs and time. Customers include companies in the semiconductor and electronics industries, offering a wide range of electronic products such as mobile devices, communication, cloud and data center infrastructure, PCs, and other internet-enabled devices.

Beneficiary of the AI hype Meanwhile, the company’s business is booming: In the past fiscal year, revenues climbed 14.8% to $4.09 billion. Net profit was $1.04 billion, resulting in a net profit margin of over 25%.

As a chip designer, the company benefits primarily from topics such as digitization, power consumption reduction, increasing security requirements, and artificial intelligence (AI).

Billion-dollar acquisition of BETA CAE Meanwhile, Cadence is trying to further improve its market position and has just announced the acquisition of BETA CAE for $1.24 billion. Approximately 60% of the purchase price will be paid in cash, with the rest being paid through the issuance of Cadence common stock to current BETA CAE shareholders.

Swiss company BETA CAE is a provider of system analysis platforms and technical simulation solutions across multiple domains. The company has a research and development center in Thessaloniki, Greece, and 13 other branches worldwide.

The deal is expected to enable entry into the structural analysis segment, opening up an additional market opportunity worth several billion dollars, according to the company’s press release.

Additional annual revenue of $40 million Management expects the acquisition to contribute approximately $40 million to total revenue in the current fiscal year. From 2025, the acquisition is also expected to have a positive impact on adjusted earnings per share.

Investors seem to be pleased with the deal. Yesterday, Cadence’s stock was up 2.5% in afternoon trading. Over the past 12 months, Cadence Design Systems has gained almost 60%, bringing its current market value to $86 billion.