Ansys To Buy EDA Software Maker Ansoft For About $832 Mln Cash And Stock

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3/31/2008 7:01:23 AM Monday, Ansys, Inc.(ANSS), a provider of engineering simulation software, said it agreedto acquire Ansoft Corp. (ANST), a maker of Electronic Design Automationsoftware, for about $832 million in a cash and stock deal.

" Y* U: {6 l; Z5 M) a1 k# ?$ nThePittsburgh, Pennsylvania-based Ansoft is a leading developer ofElectronic Design Automation, or EDA, software. Through the acquisitionof Ansoft, Ansys would make its debut into the broader EDA softwareindustry and will enhance the breadth, functionality, usability andinteroperability of the combined Ansys portfolio of engineeringsimulation solutions.
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+ K5 O( I/ C; m3 [* w" `The business combination is expected tocreate a leading provider of 'best-in-class' simulation capabilities,with combined trailing 12-month revenues of $485 million.
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+ B% V. E+ n% l# ~! W% d9 mCommentingon the deal, Ansys CEO, James Cashman, said, “With trailing 12-monthrevenues ending January 31, 2008 of $98 million, Ansoft brings acombination of new software revenue growth and strong operatingmargins.”

5 ^' E& \7 v9 V1 x" FUpon closing, Ansys currently expects the deal to bemodestly accretive to non-GAAP earnings per share in its first fullyear of combined operations and accretive beyond that. Subject tocustomary closing conditions, the transaction is anticipated to closein the second calendar quarter of 2008.

As per the terms of theagreement, for each share, Ansoft stockholders will receive $16.25 incash and 0.431882 shares of Ansys common stock. Based on the 10-daytrailing average closing price of Ansys common stock, the implied valueis $32.50 per Ansoft share. Under the deal, the Canonsburg,Pennsylvania-based Ansys will issue about 11.1 million common sharesand pay approximately $416 million.

Related to this deal,certain Ansoft stockholders, who collectively beneficially own about16% of Ansoft, agreed to vote in favor of the transaction. Upon theclosing of the transaction, Ansoft stockholders is expected to ownabout 12% of the combined company on a pro forma basis.

Ansysplans to fund the cash portion of the deal with approximately $70million of cash on-hand from the combined organization and about $346million from the proceeds of a $450 million unsecured senior term loancredit facility. Ansys ' current lender, Bank of America, N.A. (BAC),has committed to fully underwriting the credit facility and Banc ofAmerica Securities LLC has agreed to act as lead arranger.

Engineersuse Ansoft products to simulate high-performance electronics designsfound in mobile communication and Internet devices, broadbandnetworking components and systems etc. Ansoft's products are used byblue chip companies as well as small- and medium-sized enterprisesaround the world.
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- t2 T4 J! T; c: EThe merger is expected to increase operationalefficiency and lower design and engineering costs for customers, andaccelerate development and delivery of new and innovative products tothe marketplace. The complementary product nature of both companies isexpected to give Ansys one of the most complete, independentengineering simulation software offerings in the industry. With over 40direct sales offices and 21 development centers on three continents,the combined company is expected to employ approximately 1,700 people.

/ I) b/ T3 n% s" t0 q4 N+ U# e" YInconnection with the transaction, Deutsche Bank Securities Inc. isacting as exclusive financial advisor to Ansoft, and Wilson SonsiniGoodrich & Rosati, Professional Corp. is acting as legal counsel.Goodwin Procter LLP is acting as legal counsel to Ansys.
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( _4 f+ S5 \' QShares of Ansys closed Friday's regular trading at $37.92, while Ansoft shares ended Friday's trading at $23.42.

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