Cadence Design Systems, Inc. (NasdaqGS:CDNS) entered into a definitive agreement to acquire Design & Engineering business of Hexagon Smart for ?2.7 billion on September 4, 2025. Under the terms of the agreement, Cadence will pay approximately ?2.7 billion for the business. Cadence intends to fund the cash consideration of ?1.89 billion through a combination of cash on hand and borrowings under existing debt facilities. Approximately ?810 million of the Purchase Price will be paid in the form of newly issued shares of Cadence?s common stock, par value $0.01 per share (?Cadence Stock?). Proceeds from the transaction will be used for general corporate purposes, which may include de-leveraging and funding future acquisitions aligned with the strategies for long term profitable growth at both Hexagon and Octave, which if approved is still on track to be separated during the first half of 2026. The incoming business generated approximately $280 million in revenue in 2024, with over 1,100 employees across multiple global sites. The Purchase Agreement also provides for customary termination rights for the parties, including the right to terminate the Purchase Agreement due to the failure to obtain required regulatory approvals on or prior to September 4, 2026 (subject to two three-month extensions, at Cadence?s election, until March 4, 2027, the ?Outside Date?) or if a governmental authority has issued a final and non-appealable order or injunction prohibiting Closing. Under the Purchase Agreement, Cadence will be required to pay a reverse termination fee of up to ?175 million (the ?Reverse Termination Fee?) if the Purchase Agreement is terminated due to the failure to obtain required regulatory approvals on or prior to the Outside Date or following an injunction arising from certain antitrust or foreign investment laws. The Purchase Agreement contains representations and warranties, covenants, closing conditions and indemnities customary for acquisitions of this nature. The Acquisition includes substantially all of the subsidiaries and related assets comprising Seller?s design and engineering business.

Among other conditions, closing is conditioned on the expiration or termination of the applicable waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended, and receipt of other required approvals under antitrust and foreign direct investment laws of certain other jurisdictions. Closing is expected to occur in the first quarter of 2026.

Thoas De Muynck and Ben Stulberg of Jones Day acted as legal advisor to Hexagon Smart Solutions Ab. Mark Bekheit, Tessa Bernhardt, Grace Lee, James Metz, James Robinson, Josh Holian, Jana Dammann de Chapto, Tomas Nilsson, Paul Rosen, Kathleen Wells, Stephanie Teicher, Robert Brown, Les Carnegie, Andrew Galdes, Kyle Jefcoat and Dean Baxtresser of Latham & Watkins LLP acted as legal advisor to Cadence Design Systems, Inc. Evercore acted as financial advisor to Hexagon AB.

Cadence Design Systems, Inc. (NasdaqGS:CDNS) completed the acquisition of Design & Engineering business of Hexagon Smart on February 23, 2026. Sidharrth Shankar, Nandini Seth and Dhruv Malhotra of J. Sagar Associates acted as the legal advisor to Hexagon.