By Stuart Condie

SYDNEY--Altium agreed to a US$5.91 billion takeover by Japanese chip maker Renesas Electronics, putting the design-software provider on track to become the latest Australian tech company to enter foreign ownership.

Altium shares jumped as much as 31% on Thursday, hitting a record high, after the company said it had entered into a binding agreement with Renesas on a cash proposal worth 68.50 Australian dollars (US$44.46) a share.

If the deal completes, the printed-circuitboard design specialist, which also operates a parts search engine, would become the latest high-profile company to exit the Australian Securities Exchange's relatively small listed tech sector.

In 2021, ASX-listed Afterpay agreed to be acquired by Nasdaq-listed Block in a deal that valued the buy-now-pay-later operator at US$29 billion. As a result, Block has a secondary listing on the ASX, categorized as a financial stock.

Altium expects the deal to close in the second half of 2024, subject to approval by shareholders and regulators.

"Given unanimous support from the board, as well as the large premium to prior close, we would expect the transaction to be supported and go through," E&P Capital analyst Paul Mason told clients in a note.

Shares in Altium, which is scheduled to report its fiscal first-half results Feb. 27, hit a record A$67.00 in early trade Thursday. The stock was recently at A$65.83, up 28% from A$51.26 at Wednesday's close.

Renesas, which last month agreed to acquire power-semiconductor manufacturer Transphorm for about US$339 million, said it plans to fund the purchase of Altium with bank loans and cash on hand.

Renesas said the integration of Altium would help simplify complex electronics-system design processes for engineers.

"The acquisition brings together Altium's sophisticated cloud platform capabilities with Renesas's strong portfolio of embedded solutions," Renesas said.

"This brings significantly faster innovation and lowers barriers to entry for system designers by reducing development resources and inefficiencies."

Altium reported US$263.3 million in revenue for its last fiscal year, which ended June 30. Recurring revenue accounted for 77% of income, a proportion that has increased in each of the past four fiscal years.

Renesas said the acquisition would be immediately earnings accretive even without synergies. It expects both revenue and cost synergies.

Altium Chief Executive Aram Mirkazemi will continue to lead the business as a subsidiary of Renesas.

"I strongly believe that electronics is the single most critical industry to building a smart and sustainable world. Renesas's visionary leadership and commitment to making electronics accessible to all resonates strongly with Altium," Mirkazemi said.

Renesas's proposal came almost three years after Altium rejected an approach from Nasdaq-listed Autodesk.

Altium said then that Autodesk's A$38.50-a-share proposal significantly undervalued its prospects, and analysts agreed that the approach was opportunistic. Altium's shares have almost doubled in value since then.

Write to Stuart Condie at

(END) Dow Jones Newswires

02-14-24 2207ET