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Synopsys sells software integrity unit for $2.1 billion to PE group

May 6, 2024 9:33 AM

(Reuters) -Synopsys said on Monday it would sell its software integrity (SIG) unit to a private-equity group led by Clearlake Capital and Francisco Partners in a $2.1 billion deal, as it shifts its focus towards the AI chips market.

Reuters reported last week that the group had outbid competitors and was in advanced discussions to purchase the SIG unit, which offers application security testing for software developers.

Synopsys CEO Sassine Ghazi said the move sharpened the company's focus on its core chip design business and would help capitalize on the "AI-driven era."

The company helps firms such as Nvidia in determining the arrangement of hundreds of billions of transistors on small silicon squares.

The deal includes up to $475 million in cash that will be payable once the buyout firms hit certain milestones related to the deal.

Synopsys announced plans in late 2023 to divest its SIG unit. In January, the company agreed to acquire rival design software firm Ansys for $35 billion, its largest-ever deal.

The SIG deal is expected to close in the second half of 2024 and will create a new standalone entity that provides application security testing software.

The company said it would release the name of the new business at a later date.

Shares of Synopsys were up 1% in early trading.

(Reporting by Harshita Mary Varghese; Editing by Ravi Prakash Kumar and Anil D'Silva)

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