Hexagon Sells Design, Engineering Unit to Cadence for $3.15 Billion

Hexagon shares rose up to 8% after the Swedish measurement-technology group agreed to sell its design and engineering business to Cadence Design Systems for €2.7 billion ($3.15 billion). The deal is expected to close in Q1 2026 and will strengthen the long-term viability of customers and shareholders. Hexagon expects to book a gain on the deal, which will be disclosed alongside its Q3 results.

Hexagon AB, a Swedish measurement-technology group, has agreed to sell its Design & Engineering business to Cadence Design Systems for €2.7 billion ($3.15 billion). The deal, which is expected to close in the first quarter of 2026, will strengthen the long-term viability of both companies' customers and shareholders. Hexagon anticipates booking a gain on the transaction, which will be disclosed alongside its Q3 results.

The acquisition includes Hexagon's MSC Software business, an engineering simulation and analysis product that generated approximately $280 million in revenue in 2024 and has more than 1,100 employees. Cadence, which makes software for semiconductor companies, plans to pay 70% in cash and 30% through issuing its stock to Hexagon.

The deal is part of Cadence's efforts to expand its design and analysis portfolio, while Hexagon aims to streamline its portfolio and focus on its core competencies in measurement technologies and autonomous solutions. The sale reflects a broader trend in the computer-aided engineering (CAE) market, where consolidation is accelerating, and tech firms are building end-to-end simulation platforms.

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. The company expects to use the proceeds from the sale to fund R&D in autonomous systems or return capital to shareholders. The deal also signals a shift toward specialization and AI integration in the engineering simulation sector.

Hexagon's shares rose up to 8% following the announcement, indicating investor confidence in the company's strategic move. The sale underscores Hexagon's commitment to capital efficiency and strategic clarity, potentially enhancing valuation multiples for both Hexagon and its spin-off entities.

References:
[1] https://www.marketscreener.com/news/cadence-design-systems-to-buy-hexagon-s-design-and-engineering-business-ce7d59d8df8cfe22
[2] https://www.ainvest.com/news/hexagon-strategic-divestiture-implications-engineering-simulation-market-2509/
[3] https://www.marketwatch.com/story/cadence-design-systems-to-buy-hexagon-s-design-and-engineering-business-56fe1fb1