Cadence Acquires Hexagon's D&E Division for €2.7bn, Boosting System Design Capabilities.

Cadence will acquire Hexagon's D&E division for €2.7bn, bolstering its Intelligent System Design strategy and enhancing its System Design and Analysis portfolio. The acquisition will add Hexagon's D&E technology and expertise, including MSC Software's engineering simulation and analysis solutions, to Cadence's offerings in multiphysics analysis, system dynamics, metal forming, and autonomous driving simulation. The transaction is expected to be finalized in Q1 2026.

Cadence Design Systems, Inc. (CDNS) has announced a definitive agreement to acquire the Design & Engineering (D&E) division of Hexagon AB, including its renowned MSC Software business. The €2.7 billion deal, structured with 70% cash and 30% Cadence common stock, marks a significant step in advancing Cadence’s Intelligent System Design strategy. The acquisition is expected to be finalized in the first quarter of 2026, pending regulatory approvals and customary closing conditions [1].

The acquisition will bolster Cadence's System Design & Analysis portfolio by integrating Hexagon’s proven technology and expertise. Hexagon’s D&E division generated approximately $280 million in 2024 revenues and employs more than 1,100 experts worldwide in R&D, sales, and support [1]. The division’s flagship solutions, MSC Nastran and Adams, are recognized globally as the gold standard for structural and multibody dynamics simulation, crucial for industries like aerospace and automotive.

By incorporating Hexagon’s advanced simulation software, Cadence will expand its offerings to include electromagnetics, electrothermal, CFD, and now advanced structural analysis. This move aligns with the growing demand for multiphysics simulations, a market projected to grow at an 8.6% CAGR from $4.168 billion in 2025 to $6.842 billion by 2031 [2]. The acquisition will also enhance Cadence’s capabilities in system dynamics, metal forming, and autonomous driving simulation, positioning it to lead in AI-enhanced engineering workflows.

The transaction is expected to strengthen Cadence’s competitive edge against peers like Ansys and Synopsys, aligning with AI adoption in automotive and aerospace. The acquisition supports Cadence’s Intelligent System Design strategy, positioning it to deliver a unified end-to-end platform covering a wide range of physical behaviors [2]. This comes at a critical time as industries pivot toward electric vehicles, autonomous technologies, and advanced materials.

Cadence has been active in acquisitions to bolster its IP business. In April 2025, it signed a definitive agreement with Arm Holdings to acquire its Artisan foundation IP business. In January 2025, Cadence acquired Secure-IC, and in June 2024, it completed the acquisition of Switzerland-based BETA CAE Systems International AG. These acquisitions have played a pivotal role in developing Cadence’s business in the last few years [1].

Shares of Cadence Design Systems, Inc. have soared 41.2% in the past year compared to the Zacks Computer-Software industry’s growth of 23.6%. The company currently has a Zacks Rank #3 (Hold) [3].

References:
[1] https://finance.yahoo.com/news/cadence-strengthens-analysis-portfolio-hexagon-130900539.html
[2] https://www.ainvest.com/news/strategic-rationale-investment-implications-cadence-acquisition-hexagon-business-2509/
[3] Zacks Investment Research