Autodesk’s bid — declined, so far — for Altium took me by surprise. In retrospect, it probably shouldn’t have.
As I’ve noted many times, I fully expect Altium to be acquired. It’s just I was looking more in the direction of Dassault and PTC, the big mechanical CAD (MCAD) players. I should kept Autodesk in my field of view, especially after it acquired Eagle five years ago. I think I was lulled to sleep, as that was a small acquisition and Autodesk hasn’t made much of a push since to burrow into the ECAD space.
The proposal was hefty, valuing Altium at $3.91 billion. That’s not much lower than Siemens paid for the considerably larger and more profitable Mentor Graphics in 2107. Yet Altium thinks it can do better.
It just might. Autodesk’s bid prices each Altium share at AU$38.50, a 41.5% premium over Altium’s closing price on Jun. 4 and a premium of over 47.4% to the one-month volume-weighted average price. Prior to the offering, however, Altium’s stock had peaked at a 52-week high of AU$39.34 in last October. So at $38.50, Autodesk was actually underbidding a bit.
An Autodesk-Altium merger wouldn’t change the face of the ECAD industry immediately. Altium would still run neck-and-neck with Zuken for third place in revenues behind Cadence and Mentor. But it would give Altium the backing of a industry leader in 3-D CAD, and accelerate the inevitable MCAD-ECAD merger.
The silence, as they say, surrounding the pending Platinum Specialty Products acquisitions for OMG and now Alent, has been deafening.
Could it be because it’s summer, and people aren’t paying as close attention?
Could it be because that’s how the respective companies prefer it?
We receive announcements several times a week from various folks within Alent, but they haven’t said boo about the buyout. And the folks in the industry I’ve queried about it haven’t been quick to respond either, both on the Alpha and the Enthone sides.
Platinum is aggressively buying up companies in the solder and electroplating/finishing materials space, first having bid for OMG’s PCB chemicals unit (the former Electrochemicals) and now agreeing to terms for Alent, the former Cookson metals divisions which include Enthone and Alpha.
The aggregate price tag for the various units: $2.67 billion, including assumed debt.
That will add to the debt Platinum assumed when it acquired MacDermid in 2013 for $1.8 billion. The weight of these transactions is making folks inside and outside the industry a bit cautious, as this recent statement from Moody’s indicated.
Platinum paid nearly $40 million in interest in the first quarter alone, and its operating profit for the period was just $2.2 million. The additional acquisitions will further stress a balance sheet that carried $1.4 billion in debt as of Dec. 31.
Dan Leever, the man at the helm of Platinum following its buyout of MacDermid, knows the PCB industry inside and out, but it’s unclear to me how much further they can go before running into a Viasystems-like situation.