Cadence Acquires Hexagon's Design & Engineering Business for €2.7 Billion
2025-09-05
US-based EDA company Cadence has announced the acquisition of the Design & Engineering (D&E) business of Sweden's Hexagon Group, including its MSC Software business, for €2.7 billion (approximately $3.16 billion). This move marks a significant strategic step for Cadence to accelerate its expansion into the engineering simulation field beyond the realm of Electronic Design Automation (EDA), following its acquisition of BETA CAE in 2024.
Under the agreement, Cadence will complete the transaction by paying 70% in cash and issuing shares for the remaining balance. The deal is expected to close in the first quarter of 2026, subject to regulatory approvals and customary closing conditions. Should the transaction fail to go through, Cadence would be required to pay a "reverse termination fee" of up to €175 million.Cadence and Hexagon's D&E Business
Cadence is renowned for its chip design software and serves as a core tool supplier for major chip manufacturers such as NVIDIA and Qualcomm. Its Electronic Computer-Aided Design (ECAD) software is a vital tool for chip design and defect verification. Over the past twelve months, Cadence has achieved robust revenue growth of 22.3%. Additionally, Cadence has completed the acquisition of Arm Artisan's foundational IP business, enhancing its design IP portfolio and strengthening its system-on-chip design capabilities.
Hexagon's D&E business is a provider of Computer-Aided Engineering (CAE) software solutions and holds market-leading products in the fields of structural and multi-body dynamics simulation, such as its flagship products MSC Nastran and Adams, which are widely used in structural and multi-body dynamics simulations for aerospace and automotive applications. The business generated nearly €265 million in revenue in 2024 and employs over 1,100 people worldwide. Its customer base includes well-known original equipment manufacturers and suppliers in the aerospace and automotive industries, such as Volkswagen Group, BMW, Toyota, and Lockheed Martin.
Strategic Significance of the Acquisition
This acquisition addresses the growing industry demand for integrating electrical-mechanical design solutions and multi-physics simulations early in the design cycle. Moreover, it will bring a broader customer base to Cadence, including the aforementioned prominent companies in the aerospace and automotive industries. The addition of Hexagon's D&E business will significantly expand Cadence's system design and analysis portfolio, reinforcing its commitment to providing comprehensive solutions for the world's most challenging design problems.
By incorporating Hexagon's world-class D&E simulation capabilities, Cadence will extend its "Intelligent System Design™" vision to cover the full spectrum of physical behaviors—from electromagnetics and fluids to structures and motion. This will enable Cadence to offer a comprehensive multi-physics platform for customers designing complex systems in the automotive, aerospace, industrial, and robotics sectors.
Future Outlook
Upon completion of the acquisition, Cadence will further solidify its position in the engineering simulation field and enhance its influence in the structural analysis market. With the increasing global demand for complex system design and multi-physics simulation, Cadence is poised to leverage this acquisition to further cement its leading position in both the EDA and engineering simulation fields. It will be able to provide customers with more comprehensive and advanced solutions, driving the development of related industries.
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