Ansys (ANSS) announced this morning that it acquired Ansoft (ANST) for a deal valued at $832 million in cash and stock. This translates to $16.25 in cash and 0.431882 shares of ANSS for each one share of ANST stock for existing ANST.In order to fund this acquisition, ANSS is diluting by 11.1 million shares and borrowing against a credit line (as well as cash on hand from both companies) to the tune of $414 million dollars. This gives ANST holders a 39% premium to Friday's price and represents a 12% dilution to ANSS.
For investors of ANSS, like myself, the stock is off about 9% in premarket. In a warped way, this actually means the Street likes the deal, netting 3% on the 12% dilution. For ANST investors, they really don't have to change their location for reading the stock tables - just moving up one name to ANSS.
For ANSS, this represents entry into the electronic-design automation segment, and one look at ANST's chart, and it appears that their investors have liked that company's results. Whether ANSS overpaid or got a bargain is something I don't know at the moment, not being familiar with ANST, but I am willing to give management a vote of confidence in the short term.
ANSS did say that they expect the deal to be modestly accreditive within the 1st full year and the deal is expected to be closed sometime in the 2nd quarter.
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