AI and digital twin specialist Cadence has announced a significant acquisition, agreeing to purchase Hexagon’s design and engineering (D&E) business for approximately €2.7 billion. This strategic move aims to bolster Cadence’s system analysis portfolio and expand its reach in physical AI and system design.
Key Takeaways
- Cadence acquires Hexagon’s D&E division, including MSC Software, for €2.7 billion.
- The deal comprises 70% cash and 30% Cadence ordinary shares.
- Hexagon’s D&E business is a leader in CAE and simulation technologies.
- The acquisition strengthens Cadence’s system analysis capabilities for automotive, aerospace, and industrial sectors.
- The transaction is expected to close in the first quarter of 2026.
Strategic Expansion in Simulation Technology
The acquisition of Hexagon’s D&E division, a prominent player in computer-aided engineering (CAE) and simulation technologies, marks a substantial step for Cadence. This division, which includes the well-regarded MSC Software, generated around $280 million in revenue in 2024 and employs over 1,100 individuals globally. Its portfolio features advanced solutions in multiphysics analysis, system dynamics, metal forming, and autonomous driving simulation.
Enhancing the System Analysis Portfolio
Cadence anticipates that the integration of Hexagon’s D&E business will significantly complement its existing system analysis offerings. The move is designed to cater to a broader customer base, including major automotive and aerospace manufacturers and suppliers such as Volkswagen Group, BMW, Toyota, Lockheed Martin, BAE, and Boeing. These companies rely on Hexagon D&E solutions for critical simulation workflows.
Anirudh Devgan, President and CEO of Cadence, stated that the agreement is "a fundamental step" towards enabling customers to design the complex converged systems of the future. He added, "By adding Hexagon’s D&E world-class simulation capabilities, we will expand our vision of Intelligent System Design to encompass the full spectrum of physical behaviour—from electromagnetics and fluids to structures and motion."
Future Outlook and Previous Acquisitions
The deal is subject to regulatory approvals and customary closing conditions, with an expected completion in the first quarter of 2026. This acquisition follows Cadence’s purchase of Beta CAE Systems in June 2024, another engineering simulation software company specialising in CAE. These moves underscore Cadence’s commitment to strengthening its multiphysics system analysis capabilities across key sectors like automotive, aerospace, industrial, and healthcare.
Sources
- Cadence acquires Hexagon’s design and engineering business in €2.7bn deal, National Technology News.
