By Anirban Sen and Milana Vinn
NEW YORK (Reuters) – Altair Engineering, an engineering software maker with a market value of nearly $9 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.
Shares of Altair rose more than 14% on Tuesday after Reuters reported on the company’s sales talks.
Potential bidders include competing design software makers such as PTC and Cadence Design Systems, the sources said. Reuters was unable to determine whether PTC and Cadence approached Altair.
Altair and Cadence did not immediately respond to requests for comment. PTC declined to comment.
Engineering software companies have become attractive takeover targets as investors bet on companies that could benefit from the boom in artificial intelligence.
In January, chip design company Synopsys agreed to acquire design software company 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. The simulation software helps predict how products would work in the real world.
Altair founder James Scapa, who serves as the company’s chairman and CEO, controls 53.42% of voting shares through dual-class shares, according to recent filings with regulators.
Altair’s shares are up about 55% in the past year to yesterday’s close, and the company boasts a higher multiple compared to 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, at the high end of its expectations.
Altair works with several major companies, including Hewlett-Packard Enterprise, Ford Motor and International Paper.
(Reporting by Anirban Sen and Milana Vinn in New York; Editing by Nick Zieminski)
