Shares of Australian software company Altium Ltd. (AU:ALU) rallied 29% today on the news of an AU$9.1 billion takeover by Japanese semiconductor firm Renesas Electronics (RNECF). The ASX-listed Altium, which is headquartered in California, is being acquired for AU$68.50 per share in the all-cash transaction. The deal price indicates a nearly 33.6% premium to ALU’s closing stock price on Wednesday. Renesas’ Japan-listed shares fell 2.6% in reaction to the news.
More on Renesas’ Acquisition of Altium
Renesas is a key supplier of automotive and power semiconductors, catering to the requirements of automakers like Toyota and Nissan. Meanwhile, Altium is one of the leading providers of printed circuit board (PCB) design tools.
Renesas believes that the acquisition of Altium aligns with its digitalization strategy and would help build an “integrated and open electronics system design and lifecycle management platform.” It expects to leverage Altium’s cloud platform capabilities to accelerate innovation.
Renesas intends to fund the acquisition with bank loans and cash on hand. The company expects the acquisition to be immediately accretive to its earnings. Altium generated revenue of US$263 million in the fiscal year ending June 30, 2023, with recurring revenue of 77% and 36.5% EBITDA (earnings before interest, tax, depreciation, and amortization) margin.
The deal has been approved by the boards of both companies and is expected to be completed in the second half of this year, subject to approvals by Altium shareholders, Australian court, and regulators. Altium’s CEO, Aram Mirkazemi, will continue to lead the entity as a wholly-owned subsidiary of Renesas.
Altium’s Share Price Movement
Prior to today’s spike, the Altium share price advanced over 9% since the start of this year. Ahead of the announcement of the acquisition, ALU stock had a Moderate Buy consensus rating based on five Buys and two Holds.
