TOKYO -- Renesas Electronics Corporation ('Renesas', TSE: 6723), a supplier of advanced semiconductor solutions, today announced it has reached an agreement with Altium Limited ('Altium', ASX: ALU), a global leader in electronics design systems, in which Renesas will acquire all outstanding shares of Altium, making Altium a wholly-owned subsidiary of Renesas, subject to satisfaction of certain conditions (the 'Acquisition').
The acquisition will be executed by way of a Scheme of Arrangement ('SOA') under the Australian Corporations Act, which is a method of acquiring 100% of the outstanding shares of an Australian listed company and will involve the acquisition of all of Altium's shares for cash. The companies have entered into a Scheme Implementation Agreement ('SIA') which has been unanimously approved by the boards of directors of both companies
The acquisition is expected to be completed in the second half of 2024, subject to approval by Altium shareholders, Australian court approval as well as regulatory approvals and satisfaction of other customary closing conditions.
Purpose of the Acquisition
Under its Purpose, 'To Make Our Lives Easier,' Renesas has been expanding its product portfolio of embedded processors, analog, power, and connectivity, with an aim to becoming a global leader in embedded semiconductor solutions. Furthermore, Renesas has been advancing its digitization strategy that enables enhanced user experience (UX) through cloud-based development.
As technology advances, the design and integration of electronic systems is becoming increasingly complex. The current electronics system design flows are a complicated and iterative process that involves multiple stakeholders and design step, from component selection and evaluation to simulation and PCB physical design. Engineers must be able to design systems that are not only functional butalso efficient and cost-effective under shortened development cycles.
Altium's history began in 1985 from Australia as the world's first printed-circuit board (PCB) design tool provider. The company has grown into a global market leader with the most well-known PCB software tools in use today.
The acquisition enables two industry leaders to join forces and establish an integrated and open 'electronics system design and lifecycle management platform' that allows for collaboration across component, subsystem, and system-level design. The transaction strongly aligns with Renesas' digitalization strategy and represents the company's first significant step in bringing enhanced user experience and innovation at the system level for electronics system designers.
Together, Renesas and Altium, under a shared vision, aim to build an integrated and open electronics system design and lifecycle management platform that unifies these steps at a system level. The acquisition brings together Altium's sophisticated cloud platform capabilities with Renesas' strong portfolio of embedded solutions, combining high-performance processors, analog, power and connectivity. The combination will also enable integration with third-party vendors across the ecosystem to execute all electronic design steps seamlessly on the cloud. The electronics system design and lifecycle management platform will deliver integration and standardization of various electronic design data and functions and enhanced component lifecycle management, while enabling seamless digital iteration of design processes to increase overall productivity. This brings significantly faster innovation and lowers barriers to entry for system designers by reducing development resources and inefficiencies.
The acquisition strengthens Renesas' financial profile and provides shareholders significant value by accelerating our digitalization strategy. The transaction is immediately accretive to earnings without synergies; the combined company expects to achieve earnings impact from revenue and cost synergies after the completion of the transaction.
Altium brings US$263 million revenue, 36.5% EBITDA margin, and 77% recurring revenue. These figures are based on Altium's fiscal year ended June 30, 2023.
Scheme of the Acquisition
The acquisition will be executed by way of a SOA. Upon approval of the Acquisition Proposal at a shareholder meeting of Altium (approval by a majority of the shareholders present and voting and by a minimum of 75% of votes cast), approval by the Australian courts, and necessary regulatory approvals being obtained from the authorities in relevant countries, and subject to satisfaction of certain other conditions, Renesas (or, a wholly owned subsidiary) will acquire all of the outstanding shares of Altium.
Renesas will acquire shares of Altium for a cash price of A$68.50 per share, (total equity value of approximately A$9.1 billion (approximately JPY887.9 billion at an exchange rate of 97 yen to the A$). Renesas plans to finance the transaction with bank loans and cash on hand.
Future Outlook
If the acquisition completes, Altium will become a consolidated subsidiary of Renesas. The impact on the consolidated performance of Renesas will be disclosed in a timely manner as the acquisition proceeds.
Figures in this press release are calculated at the rate as of February 14, 2023: 151 yen per U.S. dollar and 97 yen per Australian dollar.
About Renesas Electronics Corporation
Renesas Electronics Corporation (TSE: 6723) delivers trusted embedded design innovation with complete semiconductor solutions that enable billions of connected, intelligent devices to enhance the way people work and live. The global leader in microcontrollers, analog, power, and SoC products, Renesas provides comprehensive solutions for a broad range of automotive, industrial, infrastructure, and IoT applications that help shape a limitless future. Learn more at renesas.com. Follow us on LinkedIn, Facebook, Twitter, and YouTube.
Cautionary note regarding forward-looking statements
This announcement may contain certain statements that are, or may be deemed to be, forward-looking statements with respect to the financial condition, results of operations and business of Renesas and/or Altium and/or the combined group following completion of the Acquisition and certain plans and objectives of Renesas with respect thereto. These forward-looking statements can be identified by the fact that they do not relate to historical or current facts. Forward-looking statements also often use words such as 'anticipate', 'target', 'continue', 'estimate', 'expect', ''forecast', 'intend', 'may', 'plan', 'goal', 'believe', 'hope', 'aims', 'continue', 'could', 'project', 'should', 'will' or other words of similar meaning. These statements are based on assumptions and assessments made by Renesas and/or Altium (as applicable) in light of their experience and perception of historical trends, current conditions, future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward-looking statements in this announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct and you are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of this announcement.
Forward-looking statements are not guarantees of future performance. Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this announcement. Neither Renesas nor Altium undertakes any obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by applicable law.
There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in the global, political, economic, business and competitive environments, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions. If any one or more of these risks or uncertainties materializes or if any one or moreof the assumptions prove incorrect, actual results may differ materially from those expected, estimated or projected. Such forward looking statements should therefore be construed in the light of such factors.
No member of the Renesas group or the Altium group nor any of their respective associates, directors, officers, employers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur.
Except as expressly provided in this announcement, no forward-looking or other statements have been reviewed by the auditors of the Renesas group or the Altium group. All subsequent oral or written forward-looking statements attributable to any member of the Renesas group or the Altium group, or any of their respective associates, directors, officers, employers or advisers, are expressly qualified in their entirety by the cautionary statement above.
RENESAS ELECTRONICS CORPORATION 
