Last week, several mega-deals took place. Therefore, I would like to present to you today another one of these top transactions beyond the 1 billion dollar mark.

On Thursday, February 15, 2024, the Japanese chip manufacturer Renesas and the US software developer Altium announced in a joint press release that they have signed an acquisition agreement under Australian law.

According to this agreement, Renesas is offering 68.50 Australian dollars (AUD) in cash for each outstanding Altium share. The offer values Altium at a whopping 8.8 billion AUD, which is approximately 5.32 billion euros.

But before I go into further details of the planned acquisition, let me introduce the two companies briefly.

The companies involved in a short profile The Renesas Electronics Corporation, based in Tokyo, Japan (Renesas is an acronym for Ren aissance S emiconductor for A dvanced S olutions), is, according to its own statements, one of the world’s leading semiconductor manufacturers. The company was founded in 2002 as a spin-off and is a merger of the divested semiconductor divisions of Hitachi, Mitsubishi Electric, and NEC.

The Japanese company offers a wide range of hardware worldwide, such as microcontrollers and microprocessors, data converters, haptic drivers, memory interfaces, USB switches and hubs, and wireless connectivity products.

Renesas is globally present and has various production facilities in Japan, China, Southeast Asia, and the USA. The company’s European headquarters are located in Düsseldorf, North Rhine-Westphalia.

The more than 21,000 employees of the semiconductor giant generated sales of 1,469.4 billion Japanese yen (JPY – approximately 9.1 billion euros) and earnings before interest, taxes, and depreciation (EBITDA) of 576.8 billion JPY (approximately 3.6 billion euros) in the fiscal year 2023.

Altium Limited, based in La Jolla, California (Greater San Diego area), is a company that develops software for the design of printed circuit boards (PCBs). The company has now become a leading global provider of PCB software tools.

With Altium 365, the company has also created the world’s first digital cloud platform for designing and implementing electronic hardware.

Altium was founded in 1985 as Protel Systems Pty Ltd in Australia. The company’s shares are listed on the Australian Stock Exchange in Sydney.

In the fiscal year 2023, which ended on June 30, 2023, Altium’s more than 800 employees generated sales of $263 million USD (approximately 244 million euros). EBITDA amounted to $97.4 million USD (approximately 90.4 million euros).

Further details The offered 68.50 AUD for each outstanding Altium share includes a takeover premium of about 34% on the closing price of Altium common stock on February 14, 2024, the last trading day before the transaction announcement. Renesas intends to finance the transaction through bank loans and its own funds.

Renesas and Altium have been working closely together for some time. In June 2023, Renesas announced that all of its printed circuit board designs would be developed using the cloud-based platform Altium 365 in the future.

Now, Renesas has taken the next step and made a takeover offer to the shareholders of the innovative US company. „The acquisition of Altium will enable us to create an integrated and open development platform that will make it easier for companies of all sizes and industries to build and scale their systems,“ said Hidetoshi Shibata, CEO of Renesas.

This is how the stock market reacted At the Sydney Stock Exchange, the price of Altium shares rose sharply after the announcement of the acquisition intentions. It jumped 28.8% to 66.00 AUD on February 15, 2024, and was thus only slightly below the 68.50 AUD offered by Renesas. Obviously, investors believe that the deal will go smoothly.

The share price of Renesas, on the other hand, took a different turn. It lost 2.5% at the Tokyo Stock Exchange on Thursday and closed at 2,536 JPY. There is much to suggest that investors will reject the deal due to the high price.

What’s next The transaction is expected to be completed in the second half of 2024. The closing of the transaction is subject to the approval of Altium shareholders, approval by the Australian court, as well as regulatory approvals and other customary closing conditions.

After the transaction is completed, Altium will be operated as a wholly-owned subsidiary of Renesas. The company will continue to be led by the current CEO, Aram Mirkazemi.