By Anirban Sen and Milana Vinn
NEW YORK (Reuters) – Altair Engineering, an engineering software maker with a market value of about $8 billion, is exploring a sale after receiving acquisition interest, three people familiar with the matter said on Tuesday.
Troy, Michigan-based Altair is working with investment bankers to gauge interest from potential suitors, the sources said, requesting anonymity as the discussions are confidential.
If the talks are successful, a deal could be signed in the coming weeks, one of the sources said, cautioning that a transaction is not guaranteed and Altair may choose to stay independent.
Potential bidders include rival design software makers such as Cadence Design Systems, the sources said. Reuters could not determine whether Cadence had approached Altair.
Altair and Cadence did not immediately respond to requests for comment.
The talks come at a time when engineering software companies have become attractive acquisition targets, as investors bet on companies that could benefit from the boom in artificial intelligence.
In January, design software Synopsys agreed to buy smaller rival Ansys in a deal worth about $35 billion. Earlier this year, Bentley Systems, which competes with Altair, held talks with Schneider Electric but a deal did not materialize.
Founded in 1985, Altair makes a range of software solutions, including what is referred to as computer-aided engineering software that helps engineers design, analyze and manufacture products.
Altair’s stock has jumped about 55% over the past year and the company currently trades at a higher multiple compared to its peers. Altair trades at roughly 46 times earnings before interest, taxes, depreciation and amortization (EBITDA), compared to roughly 30 times for Bentley Systems, according to LSEG data.
In its most recent quarterly earnings, Altair posted an 8% rise in software revenue to $135.4 million, which came in at the higher end of its guidance.
Altair works with several large corporations including Ford Motor and International Paper, according to its website.
(Reporting by Anirban Sen and Milana Vinn in New York; Editing by Nick Zieminski)
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