By Anirban Sen and Milana Vinn
NEW YORK (Reuters) – Altair Engineering, an engineering software maker with a market value of about $8 billion, is exploring a sale after receiving takeover interest, three people familiar with the matter said on Tuesday.
Troy, Michigan-based Altair is working with investment bankers to gauge interest from potential candidates, the sources said, requesting anonymity because the discussions are confidential.
If the talks are successful, a deal could be signed in the coming weeks, one of the sources said, cautioning that a transaction is not guaranteed and that Altair could choose to remain independent.
Potential bidders include competing design software developers such as Cadence Design Systems, the sources said. Reuters was unable to determine whether Cadence had approached Altair.
Altair and Cadence did not immediately respond to requests for comment.
The talks come at a time when software companies have become attractive acquisition targets as investors bet on companies that could benefit from the artificial intelligence boom.
In January, design software Synopsys agreed to acquire smaller rival Ansys in a deal worth about $35 billion. Earlier this year, Bentley Systems, which competes with Altair, held talks with Schneider Electric, but a deal did not materialize.
Founded in 1985, Altair makes a range of software solutions, including so-called computer-aided engineering software that allows engineers to design, analyze and manufacture products.
Altair’s shares are up about 55% in the past year and the company is currently trading at a higher price than its peers. Altair trades at about 46 times earnings before interest, taxes, depreciation and amortization (EBITDA), compared to about 30 times for Bentley Systems, according to LSEG data.
In its most recent quarterly results, Altair reported an 8% increase in software revenue to $135.4 million, which was at the high end of expectations.
According to its website, Altair works with several major companies, including Ford Motor and International Paper.
(Reporting by Anirban Sen and Milana Vinn in New York; Editing by Nick Zieminski)
