ANSYS (ANSS) Set to Acquire OnScale for Undisclosed Terms

ANSYS ANSS recently inked an agreement to acquire OnScale for undisclosed financial terms. Founded in 2017, OnScale is a cloud simulation software provider.

The start-up provides computer-aided engineering (CAE) solutions on next-generation cloud high-performance computing. Per the company, its solutions are 100 times faster than the legacy CAE solutions. OnScale solutions are used by engineering teams across companies in the semiconductor and MEMS, 5G mobile, next-gen biomedical and autonomous vehicle domains.

With the OnScale integration, ANSYS will be able to offer its clients (ranging from enterprise customers to start-ups) a cloud-native, web-based user interface (“UI”) for “device-independent access” to the company’s wide ranging simulation solutions and technologies.

At present, clients gain scalable location-independent access to the company’s simulation technology by using Ansys Gateway powered by AWS solution and Ansys Cloud on the Azure cloud platform. The addition of OnScale will strengthen the company’s extensible platform-centric approach and enable a new class of simulation-based, vertical applications, highlighted ANSYS. 

ANSYS, Inc. Price and Consensus

ANSYS, Inc. price-consensus-chart | ANSYS, Inc. Quote

The acquisition will have no material effect on the company’s consolidated financial statements in 2022.

Higher Demand for Simulation Software Augurs Well

Canonsburg, PA-based ANSYS is the global leader in the high-end design simulation software industry. The company offers simulation solutions to develop next-generation 5G product designs, autonomous vehicles (AVs), thinner and more reliable mobile and Internet of Things (IoT) products as well as high-performance chips for advanced driver assistance systems (ADAS).

The company’s acquisition strategy has also played a pivotal part in developing the company’s simulation software business in the last few years. Last year, the company acquired Zemax LLC for $411.5 million. Zemax is engaged in providing imaging simulation and optimization software technologies to companies in verticals like life sciences & research, aerospace and defense, manufacturing as well as consumer electronics and communications. The acquisition will help ANSYS offer its customers a comprehensive set of solutions for simulating complex optical- and photonics-powered products.

In May 2021, ANSYS acquired Phoenix Integration for an undisclosed amount. Phoenix is a software-maker specializing in model-based engineering (MBE) and model-based systems engineering (MBSE).

In 2020, ANSYS acquired Analytical Graphics, Inc and Lumerical Inc.  Analytical Graphics is engaged in providing analysis and simulation solutions for defense and aerospace verticals, including critical missions like satellite launches, whereas Lumerical is engaged in the development of silicon photonics design and simulation solutions.

Some other noteworthy buyouts in the past include Dynardo, Livermore Software Technology Corporation (“LSTC”), Granta, Helic, OPTIS, 3DSIM and CLK Design Automation, among others.

At present, ANSYS carries a Zacks Rank #3 (Hold). Shares of ANSS have lost 21% against the industry’s gain of 1.4% in the past year.

Key Picks

Some better-ranked stocks from the broader technology sector are Broadcom AVGO, Apple AAPL and Synopsys SNPS. All the stocks carry a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

The Zacks Consensus Estimate for Broadcom’s fiscal 2022 earnings is pegged at $35.67 per share, up 7.6% in the past 60 days. AVGO’s long-term earnings growth rate is pegged at 14.5%.

Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, with the average being 1.9%. Shares of AVGO have increased 23.4% in the past year.

The Zacks Consensus Estimate for Apple’s fiscal 2022 earnings is pegged at $6.16 per share, up 0.2% in the past 60 days. The long-term earnings growth rate is pegged at 12.5%.

Apple’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, with the average being 20.3%. Shares of AAPL have rallied 26.7% in the past year.

The Zacks Consensus Estimate for Synopsys fiscal 2022 earnings is pegged at $7.90 per share, up 1.5% in the past 60 days. The long-term earnings growth rate is 16.2%.

Synopsys’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, with the average being 4.3%. Shares of SNPS have gained 17% in the past year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.