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(Sharecast News) - Shares in Hexagon rallied on Friday, after the Swedish firm struck a deal to sell part of its business to Cadence Design Systems.
The Stockholm-listed company has agreed to sell its global design and engineering business to the US firm, which makes software and hardware used in designing semiconductors.
Cadence will pay 2.7bn for the unit, 30% of which will be through the issuance of common stock to Hexagon and the rest in cash.
The sale is part of a wider plan by Hexagon, a specialist in measurement technologies, to streamline its portfolio and strengthen finances.
Ola Rollen, chair, said: "Our D&E business...has delivered strong results since we acquired MSC Software in 2017.
"However, the engineering simulation market is evolving rapidly, with electronic design automation suppliers increasing taking a leading role, a tread which is harder for Hexagon to follow.
"By transitioning D&E to Cadence...and establishing a long-term collaboration between our companies, we are creating a stronger future for our customers, employees and shareholders."
As at 1045 BST, the stock was trading 7% higher.
Cadence said the deal would give it a wider customer base. Aerospace and automotive original equipment manufacturers and suppliers who currently use Hexagon's D&E products include Volkswagen Group, BMW, Lockheed Martin, BAE and Boeing, among others.
The unit, which employs more than 1,100 people worldwide, generated revenues of around $280m in 2024.
The deal is expected to close in the first quarter of 2026, subject to regulatory approvals.