Hexagon gains 7.7% on Tradegate vs Stockholm close

Hexagon gains 7.7% on Tradegate vs Stockholm close

Hexagon AB (publ) experienced a notable rise in its stock price on September 2, 2025, gaining 7.7% on the Tradegate exchange compared to the close in Stockholm. This significant increase comes amidst a series of strategic moves by the Swedish industrial software giant, which are reshaping its business landscape and positioning it for growth in high-tech sectors.

Hexagon's recent strategic divestitures and restructuring efforts have been pivotal in this stock performance. In September 2025, the company sold its Design & Engineering (D&E) business to Cadence Design Systems for €2.7 billion, with 30% paid in Cadence stock [1]. This transaction not only generated immediate liquidity but also streamlined Hexagon's portfolio by focusing on its core competencies in measurement technologies and autonomous solutions. The D&E unit, while profitable, no longer aligned with Hexagon’s strategic emphasis, and its sale reflects a broader trend in the computer-aided engineering (CAE) market [2].

Additionally, Hexagon's July 2025 divestitures within its Safety, Infrastructure & Geospatial (SIG) division further illustrate its focus on core competencies. The company sold U.S. Federal IT services, geospatial data production, and ruggedized hardware assets to Bart & Associates (B&A), generating €90 million in 2024 revenues [3]. This move allows SIG to concentrate on its fast-growing public safety business and prepares the division for potential separation as part of Hexagon’s broader spin-off strategy [4].

The most transformative move for Hexagon is the impending spin-off of its Asset Lifecycle Intelligence (ALI) division into a standalone entity, NewCo. This entity will integrate SIG, ETQ, and Bricsys, forming a software and SaaS company with €1.45 billion in 2024 revenues and a 31% adjusted operating margin [6]. The separation, slated for a U.S. stock exchange listing in early 2026, aims to unlock value by allowing NewCo to pursue its own growth strategy in asset lifecycle management, safety, and geospatial intelligence.

These strategic moves by Hexagon underscore a calculated shift in capital allocation and sector positioning, with profound implications for the engineering simulation market. By offloading non-core assets and refocusing on high-growth domains, the Swedish industrial software giant is accelerating industry consolidation while unlocking value for stakeholders. Capital Reallocation: From D&E to Core Competencies

The sale of the D&E business to Cadence exemplifies the trend of tech firms building end-to-end simulation platforms, while the formation of NewCo reflects the sector’s shift toward niche, high-growth SaaS models. For investors, these moves highlight two key dynamics: capital efficiency and strategic clarity. Hexagon’s €2.7 billion from the D&E sale and undisclosed SIG proceeds provide flexibility to fund R&D in autonomous systems or return capital to shareholders. By separating ALI into NewCo, Hexagon reduces operational drag and enhances transparency, potentially improving valuation multiples for both entities [5].

In conclusion, Hexagon's strategic reallocation of capital—from divesting mature CAE assets to spinning off high-growth SaaS businesses—positions it to thrive in a tech-driven industrial landscape. While the company exits competitive markets to consolidators like Cadence, it gains agility to innovate in measurement and autonomy. For the engineering simulation sector, this signals a shift toward specialization and AI integration, with Hexagon and its spin-off, NewCo, poised to lead in their respective domains.

References:
[1] Hexagon agrees sale of Design & Engineering business to Cadence for 2.7bn EUR [https://hexagon.com/company/newsroom/press-releases/2025/hexagon-agrees-sale-of-design--engineering-business-to-cadence-for-27bn-eur]
[2] Cadence to Acquire Hexagon's Design & Engineering Business [https://www.gurufocus.com/news/3095067/cadence-to-acquire-hexagons-design-engineering-business-accelerating-expansion-in-physical-ai-and-system-design-and-analysis]
[3] Hexagon agrees sale of non-core business areas [https://hexagon.com/company/newsroom/press-releases/2025/hexagon-agrees-sale-of-non-core-business-areas]
[4] Hexagon prepares for the spin-off of its Asset Lifecycle Intelligence division [https://hexagon.com/company/newsroom/press-releases/2025/hexagon-prepares-for-the-spin-off-of-its-asset-lifecycle-intelligence-division-and-related-businesses]
[5] Geographic Information System Market Size and Share [https://www.mordorintelligence.com/industry-reports/geographic-information-system-market]
[6] Hexagon AB (publ) Earnings Call Transcript Q3 2023 [https://www.roic.ai/quote/HXGBY/transcripts/2023/3]