This enterprise value is equivalent to $37.25 per Mentor share and represents a premium of 21 percent over the Mentor closing price on Friday November 11.
Mentor has reportedly been considering strategic options since Elliot Management Corp. acquired an 8.1 percent stake in the company in September. Mentor's board of directors has recommended shareholders to adopt the merger and Mentor shareholder Elliott Management has committed to support the transaction.
Siemens, with annual revenues of €79.6 billion (about $85 billion), is a leading European conglomerate that provides power, industrial and medical infrastructure and equipment. Siemens recently confirmed plans to spin off its healthcare business. Mentor, with annual revenues of about $1.2 billion, started in 1981 out in design automation for ICs but has increasingly focused on PCB and system design and development including mechanical and thermal alongside electronic design, as well as the provision of operating systems and software. It's customer base in automotive, industrial and aerospace provides a fit with Siemens intention to reinvent itself.
Siemens said the acquisition would be compliant with its Vision 2020 plan serve the digital industrial enterprise as part of Industry 4.0. "Siemens is acquiring Mentor as part of its Vision 2020 concept to be the benchmark for the new industrial age. It's a perfect portfolio fit to further expand our digital leadership and set the pace in the industry," said Joe Kaeser, President and CEO of Siemens, in a statement.
In the same statement Wally Rhines, long-time chairman and CEO of Mentor, said the move would unlock "significant opportunities for our employees," while at the same time providing "immediate and certain value to our stockholders."
Mentor will join the product lifecycle management (PLM) software business of the digital factory (DF) division of Siemens. The deal is subject to customary closing conditions and is expected to close in the second quarter of 2017.
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