Acquisition Expected to be Accretive to Non-GAAP EPS Immediately After Closing
SOUTHPOINTE, Pa., Feb. 16 /PRNewswire-FirstCall/ -- ANSYS (Nasdaq: ANSS),
a global innovator of simulation software and technologies designed to
optimize product development processes, today announced it has signed a
definitive agreement to acquire Fluent, Inc., a global provider of computer-
aided engineering (CAE) simulation software.
Under the terms of the merger agreement, ANSYS will issue 6,000,000 shares
of its common stock and pay approximately $300 million in net cash to acquire
Fluent, subject to certain adjustments at closing. The transaction is valued
at approximately $565 million based on the $44.11 per share closing price of
ANSYS common stock on February 15, 2006. ANSYS will use a combination of
existing cash and approximately $200 million from committed bank financing to
fund the transaction.
Fluent, Inc. is a global supplier of CAE simulation software technologies
and services. Fluent products utilize computational fluid dynamics (CFD)
principles and techniques to enable engineers and designers to simulate fluid
flow, heat and mass transfer, and related phenomena involving turbulent,
reacting, and multiphase flow. The company's products are used by blue chip
companies, small and medium sized enterprises, and academic institutions and
institutes around the world. Today, CFD simulation technology is used in
almost every industry sector and manufactured product, with an annual growth
rate of 18% through 2009 according to marketing research firm Daratech, Inc.
The acquisition of Fluent is expected to enhance the breadth,
functionality, usability and interoperability of the ANSYS portfolio of
simulation solutions. This will increase operational efficiency and lower
design and engineering costs for customers, and accelerate development and
delivery of new and innovative products to the marketplace. The combination
of Fluent's and ANSYS' software products and services is expected to give
ANSYS one of the most complete, independent engineering simulation software
offerings in the industry, reaffirming and strengthening ANSYS' commitment to
open interface and flexible simulation solutions that are primarily driven by
customer demand and choice. With over 40 direct sales offices and 17
development centers, on three continents, the combined company will employ
approximately 1,350 people.
"We are very excited about the industry leading technologies that Fluent
adds to ANSYS' simulation capabilities," said James Cashman, President and CEO
of ANSYS. "Both companies have a strong commitment to their customers and
employees and share a passion for the development of innovative products and
services and a history of world-class execution. This combination will
strengthen these values and will allow us to better serve our customers by
accelerating delivery of comprehensive, customer-driven engineering simulation
solutions and by enabling us to provide high quality support throughout the
world."
"The simulation technologies that Fluent adds complement and broaden the
existing ANSYS portfolio of simulation solutions, enabling the combined
company to deliver the integration, functionality and interoperability
required by customers across a broad range of industries and applications.
With total sales of $121.9 million in 2005 (unaudited), Fluent has a
combination of strong new software revenue growth and a high level of annually
recurring revenue. This solid revenue base, combined with its strong
profitability, should enable the transaction to be immediately accretive to
non-GAAP earnings after the closing," stated Cashman.
"This merger brings together two great companies with a shared vision and
strong engineering focus," said Dr. Bharatan Patel, CEO and founder of Fluent.
"The combination of our R&D teams and complimentary technological strengths
will enhance our ability to deliver innovative world-class simulation software
technologies to customers."
"The combination of Fluent's extensive portfolio of analysis, engineering
design, preprocessing and simulation solutions with ANSYS' existing simulation
capabilities creates a "best of breed" company that will continue to lead the
evolution and innovation of engineering simulation by enabling customers to
improve their product development processes, reduce time-to-market for new
products and improve product innovation and performance," said Dr. Ferit
Boysan, President and COO of Fluent.
Both companies' boards of directors and the stockholders of Fluent have
approved the transaction. Subject to customary closing conditions and the
expiration or termination of the waiting periods under the Hart-Scott-Rodino
Act, the transaction is anticipated to close in the second quarter of 2006.
Concurrent with the execution of the merger agreement, ANSYS entered into a
registration rights agreement with the stockholders of Fluent, which provides
that the 6,000,000 shares issued in the transaction will be registered by
ANSYS after the consummation of the transaction and, with limited volume
exceptions, subjects the stockholder parties to such agreement to a six month
lock-up on sales of such shares.
Upon the closing of the transaction, Daniel H. Blumenthal, a Managing
Partner of Willis Stein & Partners, which is the controlling stockholder of
Fluent, will join the ANSYS board of directors. Dr. Ferit Boysan will join
ANSYS as Vice President and General Manager, reporting directly to ANSYS's
President and CEO. Additionally, Dr. Bharatan Patel will continue to work
closely with the combined company to provide his expertise and knowledge to
the President and CEO and the Board of Directors of ANSYS under a separate
multi-year consulting agreement.
Fluent is a subsidiary of Aavid Thermal Technologies, Inc., which is also
a provider of thermal management solutions for electronics. Prior to the
closing of the acquisition, the thermal management solutions business will be
spun-off to the stockholders of Aavid Thermal Technologies, Inc., and ANSYS
will acquire Fluent and the remaining holding companies.
ANSYS will hold a teleconference call today at 9:00 a.m. Eastern Time to
announce its fourth quarter and 2005 earnings and discuss recent
announcements. The call will be accessible by direct dial at 800-811-8824 or
913-981-4903 and the passcode is "ANSYS". The call will be recorded and a
replay will be available approximately two hours after the call ends. The
replay will be available for one week by dialing 888-203-1112 or 719-457-0820
and the passcode is "ANSYS" or "26797". The archived webcast can be accessed,
along with other financial information, on ANSYS' website at
http://www.ansys.com/corporate/investors.asp . A presentation describing the
transaction will be made available on the ANSYS website at http://www.ansys.com under
the Investors tab.
About ANSYS, Inc.
ANSYS, Inc., founded in 1970, develops and globally markets engineering
simulation software and technologies widely used by engineers and designers
across a broad spectrum of industries. ANSYS focuses on the development of
open and flexible solutions that enable users to analyze designs directly on
the desktop, providing a common platform for fast, efficient and cost-
conscious product development, from design concept to final-stage testing and
validation. Headquartered in Canonsburg, Pennsylvania with more than 25
strategic sales locations throughout the world, ANSYS and its subsidiaries
employ approximately 600 people and distribute ANSYS products through a
network of channel partners in over 40 countries. Visit http://www.ANSYS.com
for more information.
About Fluent, Inc.
Fluent is a global provider of engineering simulation software
technologies and consulting services. Fluent's software is used for
simulation, visualization, and analysis of fluid flow, heat and mass transfer,
flow-induced noise and chemical reactions utilizing computational fluid
dynamics. It is a vital part of the CAE process for companies around the world
and is deployed in nearly every manufacturing industry. Using Fluent's
software, engineers build virtual prototypes and simulate the performance of
proposed and existing designs, allowing them to improve design quality while
reducing cost and speeding time to market. Fluent's corporate headquarters are
located in Lebanon, New Hampshire, USA, with offices in Belgium, England,
France, Germany, India, Italy, Japan, China and Sweden. For more information
visit, http://www.Fluent.com
Certain statements contained in the press release regarding matters that
are not historical facts, including statements regarding ANSYS's expectations
that the proposed acquisition, if completed, should be immediately accretive
to non-GAAP earnings and statements regarding the impact of the pending
acquisition as well as statements concerning the projected growth in the CAE
industry, ANSYS's ability to deliver customer-driven engineering simulation
solutions and statements concerning the ability of ANSYS to lead the evolution
and innovation of engineering simulation, are "forward-looking" statements (as
defined in the Private Securities Litigation Reform Act of 1995). Because such
statements are subject to risks and uncertainties, actual results may differ
materially from those expressed or implied by such forward-looking statements.
All forward-looking statements in this press release are subject to risks and
uncertainties. These include the risk that the acquisition of Fluent may not
be consummated, the risk that the business of ANSYS and Fluent may not be
combined successfully or such combination may take longer or cost more to
accomplish than expected, and the risk that operating costs, customer loss and
business disruption following the acquisition of Fluent may be greater than
expected. Additional risks include the risk of a general economic downturn in
one or more of ANSYS' primary geographic regions, the risk that the
assumptions underlying ANSYS' anticipated revenues and expenditures will
change or approve inaccurate, the risk that ANSYS has overestimated its
ability to maintain growth and profitability and control costs, uncertainties
regarding the demand for ANSYS' products and services in future periods, the
risk that ANSYS has overestimated the strength of the demand among its
customers for its products, risks of problems arising from customer contract
cancellations, uncertainties regarding customer acceptance of new products,
the risk that ANSYS' operating results will be adversely affected by possible
delays in developing, completing, or shipping new or enhanced products, risks
that enhancements to ANSYS' products may not produce anticipated sales,
uncertainties regarding fluctuations in quarterly results, including
uncertainties regarding the timing of orders from significant customers, and
other factors that are detailed from time to time in reports filed by ANSYS,
Inc. with the Securities and Exchange Commission, including ANSYS, Inc.'s 2004
Annual Report and Form 10-K. We undertake no obligation to publicly update or
revise any forward-looking statements, whether changes occur as a result of
new information or future events after the date they were made.
SOURCE ANSYS, Inc.
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Related links:
http://www.ansys.com
http://www.Fluent.com
CONTACT:
Lisa O'Connor, ANSYS, Inc., +1-724-514-1782,
lisa.oconnor@ansys.com
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