Synopsys in talks to sell software unit to buyout firms for over $2 billion, report

In the whirlwind of tech acquisitions, the software integrity (SIG) unit of chip designer Synopsys appears to be the next on the chopping block. According to an exclusive report from Reuters, a private equity consortium fronted by Clearlake Capital and Francisco Partners, is in the final stages of negotiations to snap up the SIG division for a hefty sum exceeding $2 billion.

Sources close to the matter told Reuters that Clearlake and Francisco Partners clinched the deal amidst fierce competition from other buyout contenders. If all goes according to plan, an official announcement could hit the wires as early as next week. However, insiders caution that these discussions are shrouded in secrecy, hence the insistence on anonymity.

Neither Synopsys nor Francisco Partners were available for immediate comment, while Clearlake remained tight-lipped on the matter, Reuters reported.

The report of the potential sale comes just four months after Synopsys acquired Ansys for $35 billion, marking the emergence of a new engineering software industry. The move also followed Synopsys co-founder Aart de Geus handing over the CEO role to Chief Operating Officer Sassine Ghazi just two weeks ago.

This potential sale follows Synopsys’ strategic decision, announced late last year, to offload its SIG unit, which specializes in application security testing for software developers. It’s a move that aligns with Synopsys’ broader trajectory, notably its recent blockbuster acquisition of design software rival Ansys for a whopping $35 billion, marking its largest deal to date.

For Clearlake and Francisco Partners, diving into the software sector is nothing new. The duo already shares ownership of Perforce Software, a company catering to enterprise clients with its suite of application development tools. With heavyweights like telecommunications giant Motorola Solutions, Japanese powerhouse Toshiba, and data storage leader Seagate Technology among Perforce’s clientele, this potential acquisition seems like a natural progression in their portfolio expansion.

“Since inception 37 years ago, Synopsys has been an innovation pioneer, central to world-changing semiconductor advances in computation, networking, and mobility, and now enabling the new era of ‘pervasive intelligence’,” Aart de Geus, Executive Chair and Founder of Synopsys said back in January.