(Bloomberg) — Chip design company Synopsys Inc. is selling its software integrity business to two private equity firms for up to $2.1 billion in cash.
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Clearlake Capital and Francisco Partners are buying the cybersecurity-focused company and will run it as a new, as-yet-unnamed independent company, according to a statement Monday. Synopsys will receive $1.5 billion at closing, $125 million over five quarters and up to $475 million subject to a specified rate of return.
The move allows Synopsys to focus on its core business of providing semiconductor design tools, CEO Sassine Ghazi said in the release. The transaction comes about three months after the company agreed to buy engineering software maker Ansys Inc. for about $34 billion, in one of the largest technology acquisitions in recent years.
The divestment could strengthen Synopsys’ margins, as the software integrity unit has held back profit growth in recent years, Clarke Jeffries, an analyst at Piper Sandler, wrote in an April note. Synopsys management first announced last year that it was considering selling the unit. Some analysts view the $2.1 billion price tag for the unit as a discount.
Current management of the software integrity unit is expected to lead the newly independent company, the companies said. The deal is expected to be finalized in the second half of the year.
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