Synopsys: Maintaining $480 Valuation as It Agrees to Acquire Wide-Moat Ansys

On Jan. 16, narrow-moat Synopsys announced that it entered into a definitive agreement to acquire wide-moat Ansys, a deal initially reported upon in late December, in a cash and stock deal for an enterprise value of approximately $35 billion or total consideration of $390 per share (based on stock prices as of Dec. 21 before initial reports of this acquisition surfaced). For Synopsys, we’re a bit more comfortable with the deal price, as early reports suggested that the bids for Ansys were “well in excess of $400 per share.” Based on these terms, we view the Ansys acquisition as neutral to our Synopsys fair value estimate, which is unchanged at $480 per share.