Cadence Design Systems completed its acquisition of Hexagon AB’s Design & Engineering (D&E) business on February 23 2026, a transaction valued at roughly €2.7 billion (≈$2.7 billion). The deal was structured as 70 % cash and 30 % Cadence common stock, bringing MSC Software’s flagship multiphysics tools—MSC Nastran and Adams—into Cadence’s System Design & Analysis (SDA) suite.
The integration is projected to add about $160 million in incremental revenue to Cadence’s 2026 top line and will be 28 cents dilutive to earnings per share in 2026, becoming accretive in 2027. The acquisition aligns with Cadence’s “Intelligent System Design” strategy, positioning the company to deliver a unified end‑to‑end platform that couples AI‑driven design exploration with physics‑based simulation for autonomous systems, robotics, and advanced transportation.
Cadence’s FY 2025 results, released on February 17 2026, showed full‑year revenue of $5.297 billion and GAAP diluted EPS of $4.06. The company guided FY 2026 revenue to $5.9 billion–$6.0 billion and EPS to $8.05–$8.15, both above consensus. Hexagon D&E generated €265 million (≈$280 million) in revenue in 2024, underscoring the size of the business Cadence is adding.
Management highlighted the strategic fit: “This acquisition marks a major milestone in advancing our vision for intelligent system design. By combining our industry‑leading computational software and AI‑driven design expertise with MSC Software’s world‑class structural and physics‑based analysis technologies, we’re empowering customers to push the boundaries of what’s possible—from autonomous systems and advanced robotics to the future of transportation.” CFO John Wall noted the company began 2026 with a record backlog of $7.8 billion, adding that “67 % of 2026 revenue is coming from beginning backlog.”
Following Cadence’s Q4 2025 earnings release, the market reacted mildly to cautious commentary on China and hardware visibility, despite the strong results and guidance. The slight dip reflected investor focus on potential headwinds in those segments, even as the company’s overall trajectory remains robust.
The acquisition expands Cadence’s reach beyond semiconductor EDA into the growing physical AI and multiphysics markets, strengthening its competitive moat against rivals such as Synopsys. By integrating MSC’s multiphysics capabilities, Cadence can offer a more comprehensive solution for complex system design, positioning it to capture new high‑margin revenue streams in autonomous vehicle and robotics sectors.
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