Siemens Makes Another Big CAE Purchase with Mentor Graphics

Electronic design automation and simulation software added to Siemens’ growing CAE portfolio.

Thermal simulation of a printed circuit board (PCB) using Mentor FloTHERM. (Image courtesy of Mentor Graphics.)

Thermal simulation of a printed circuit board (PCB) using Mentor FloTHERM. (Image courtesy of Mentor Graphics.)

Designing a MEMS using Tanner. (Image courtesy of Mentor Graphics.)

Designing a MEMS using Tanner. (Image courtesy of Mentor Graphics.)

Less than a year after their acquisition of computational fluid dynamics (CFD) giant CD-adapco, Siemens has now made another power play in the computer-aided engineering (CAE) space. Siemens is now the proud owner of integrated circuit design software company, Mentor Graphics (Mentor).

Mentor is no stranger to the simulation world, having their own CFD technology in the form of their 3D CFD flagship FloTHERM, CFD in-CAD software FloEFD, and 1D CFD software Flowmaster.

However, they are also known for their printed circuit board (PCB) design and simulation software. This includes: Veloce emulation platform, signal and power integrity analysis software HyperLynx, and microelectromechanical systems (MEMS) and RF design Tanner EDA (electronics design automation) tool suite.

“By adding Mentor’s electronic design automation solutions and talented experts to our team, we’re greatly enhancing our core competencies for product design that creates a very precise digital twin of any smart product and production line,” said Klaus Helmrich, member of the Managing Board of Siemens.

Siemens gets a lot of goodies with this deal. Given the industry’s push towards technologies for designing the Internet of Things (IoT) and digital twins, the move isn’t that surprising.

However, when it comes to the IoT, most CAE companies have aimed at IoT Platforms which control the connected devices. Siemens and Dassault Systems, on the other hand, are also focusing on software to design the devices.

What to Expect from a Siemens-Mentor Merger

In the merger agreement, Siemens agrees to acquire Mentor for $37.25 (USD) per share, which adds up to a grand total of $4.5 billion dollars. This is a premium of 21 percent compared to Mentor’s Veteran’s Day closing price. Last year, Mentor made revenues of $1.2 billion with an operating margin of 20.2 percent. This asking price is is four and a half times the purchasing price of CD-adapco. Clearly, Siemens saw Mentor Graphics to be a must-buy for their portfolio.

“Siemens is acquiring Mentor as part of its Vision 2020 concept to be the Benchmark for the New Industrial Age. It’s a perfect portfolio fit to further expand our digital leadership and set the pace in the industry,” said Joe Kaeser, President and CEO of Siemens AG.

This merger might have some Mentor Graphics users wondering, what will this mean for them? Though every merger and acquisition is different, Siemens appeared to have a fairly hands-off approach to the acquisition of CD-adapco. Much of the staff appears to be remaining in place, and releases to STAR-CCM+ have remained consistent and thorough.

It’s fair to assume that this will also be the case with Mentor Graphics. Besides, with an asking price of $4.5 billion, Siemens wants more than just technology; they want the staff and customer base to maintain that technology.

“With Mentor, we’re acquiring an established technology leader with a talented employee base that will allow us to supplement our world-class industrial software portfolio. It will complement our strong offering in mechanics and software with design, test and simulation of electrical and electronic systems,” explained Helmrich.

To learn more about Mentor Graphic’s EDA technology, check out the white paper “MEMS Jumpstart Series: Creating a Resonator.”

Written by

Shawn Wasserman

For over 10 years, Shawn Wasserman has informed, inspired and engaged the engineering community through online content. As a senior writer at WTWH media, he produces branded content to help engineers streamline their operations via new tools, technologies and software. While a senior editor at Engineering.com, Shawn wrote stories about CAE, simulation, PLM, CAD, IoT, AI and more. During his time as the blog manager at Ansys, Shawn produced content featuring stories, tips, tricks and interesting use cases for CAE technologies. Shawn holds a master’s degree in Bioengineering from the University of Guelph and an undergraduate degree in Chemical Engineering from the University of Waterloo.