Synopsys (NASDAQ:) Inc. has completed the divestiture of its Software Integrity business, according to a recent 8-K filing with the Securities and Exchange Commission. On Monday, the company completed the sale to entities controlled by investment groups Clearlake Capital Group, LP and Francisco Partners.
The transaction details remain confidential, but the move marks a significant shift for Synopsys, which is known for its electronic design automation software and is listed under the prepackaged software industry. The sale of the Software Integrity business could suggest a strategic reorientation for the Delaware-based company, which has its main executive offices in Sunnyvale, California.
Synopsys, trading on the Global Select Market under the ticker NASDAQ:SNPS, did not publicly state the reasons for the sale or provide information on financial terms. However, the completion of this deal could signal a repositioning of the company’s portfolio towards its core competencies or other growth areas.
In other recent news: Synopsys Inc . reported 13% revenue growth and 27% non-GAAP earnings per share (EPS) growth in the third quarter of 2024, exceeding targets. Deutsche Bank (ETR:) maintained a Buy rating on Synopsys, attributing the strong performance to substantial hardware sales and a 32% year-over-year increase in intellectual property (IP) revenues. The company’s full-year guidance for 2024 calls for revenue between $6.105 billion and $6.135 billion, and non-GAAP earnings per share ranging from $13.07 to $13.12.
At the same time, Synopsys announced a partnership with Taiwan Semiconductor Manufacturing Company (TSMC) to deliver advanced Electronic Design Automation (EDA) and Intellectual Property (IP) solutions. The partnership aims to increase computing performance and engineering productivity for AI and multi-die chip designs. In addition, Synopsys and TSMC have introduced a multi-physics flow that supports CoWoS interposer packaging to address thermal and energy integrity challenges in multi-die designs.
In an important development Keysight Technologies (NYSE:) announced its intention to acquire the Optical Solutions Group of Synopsys, Inc. to take over. This acquisition is expected to strengthen Keysight’s software portfolio with advanced optical system design and simulation tools, pending the successful completion of Synopsys’ acquisition of Ansys (NASDAQ:).
In another development, Synopsys Inc. launched. ImSym, an imaging system simulator platform aimed at improving the development process for imaging products. The platform enables comprehensive simulation of the entire imaging chain, potentially increasing efficiency by up to 60 times compared to traditional methods.
InvestingPro Insights
Now Synopsys Inc. (NASDAQ:SNPS) completes the divestiture of its Software Integrity business, data from InvestingPro provides additional context for the company’s financial position. Despite the recent sale, Synopsys maintains a robust market cap of $76.03 billion, underscoring its significant presence in the pre-packaged software industry.
The company’s financial health appears strong, with impressive gross profit margins of 80.5% over the trailing twelve months as of Q3 2024. This lines up with an InvestingPro tip highlighting Synopsys’ “impressive gross profit margins,” indicating on efficient cost management, even as the company reshapes its operations. portfolio.
Another relevant InvestingPro tip notes that Synopsys is a “prominent player in the software industry,” which could explain the strategic decision to divest the Software Integrity business and possibly focus on its core strengths. The company’s revenue growth of 26.26% over the last twelve months indicates a trajectory of expansion that investors would like to see continue post-divestment.
For those interested in a deeper analysis, InvestingPro offers 13 additional tips on Synopsys, which provide a comprehensive look at the company’s financial health and market position.
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