More Action in Industrial Software with Siemens Deal

In a move that reinforced the industry-wide trend toward a more digital industrial environment, Siemens added to its Digital Industrial Enterprise portfolio of software with a deal to buy Mentor Graphics, Wilsonville, OR, for $4.5 billion. Mentor’s board has approved the merger agreement and issued a recommendation to shareholders of the NASDAQ-listed company. During 2016, GE, Schneider and Rockwell Automation all announced investments in their industrial software portfolios.

The acquisition adds Mentor’s established electronics, integrated circuit (IC) and systems design, simulation and manufacturing solutions to the Siemens Digital Industrial Enterprise platform, capabilities Siemens said are essential for smart connected products such as autonomous vehicles by providing mechanical, thermal, electronic and embedded software tools. Mentor will join the Siemens Digital Factory Division, contributing significantly to its product lifecycle management (PLM) software business, said a Siemens release.

“Siemens is acquiring Mentor as part of its Vision 2020 concept to be the Benchmark for the New Industrial Age. It’s a perfect portfolio fit to further expand our digital leadership and set the pace in the industry,” said Joe Kaeser, president and CEO of Siemens AG, in a release.

Mentor has about 5,700 employees in 32 countries worldwide and generated revenue of approximately $1.2 billion in its fiscal 2016.

Mentor serves a large, diverse customer base of marquee systems companies and IC/semiconductors companies with over 14,000 global accounts across communications, computer, consumer electronics, semiconductor, networking, aerospace, multimedia, and transportation industries. Mentor is viewed as a global leader in strategic industry segments including IC design, test and manufacturing; electronic systems design and analysis; and emerging markets including automotive electronics, Siemens said.

“Combining Mentor’s technology leadership and deep customer relationships with Siemens’ global scale and resources will better enable us to serve the growing needs of our customers, and unlock additional significant opportunities for our employees,” said Walden Rhines, chairman and CEO of Mentor.

“Siemens is an ideal partner with financial depth and stability, and their resources and additional investment will allow us to innovate even faster and accelerate our vision of creating top-to-bottom automated design solutions for electronic systems. We are excited to join the Siemens family, as it is clear they share the same values and focus on customer success, and are pleased that this transaction provides immediate and certain value to our stockholders.”

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