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Synopsys (NASDAQ:SNPS) agreed to sell its Software Integrity Group business for as much as $2.1 billion to private equity firms Clearlake Capital Group and Francisco Partners.
The transaction includes a payment of as much as $475 million in cash payable to Francisco Partners and Clearlake achieving a specified rate of return in connection with one or more liquidity transactions, according to a statement on Monday.
The deal is expected to close in the second half of this year. The existing Software Integrity Group management team is expected to lead the newly independent, privately held company after the transaction closes. The name of the new standalone entity will be announced at a later date.
Reuters reported on Thursday that Synopsys was in advanced talks to sell the software integrity unit to Clearlake and Francisco Partners. Synopsys CEO Sassine Ghazi on the company’s earnings conference call in November said that the board had decided to explore strategic alternatives for the software integrity business.
The sale come as Synopsys (SNPS) agreed in January to buy engineering software firm Ansys (ANSS) in a cash-and-stock deal valued at about $35B.
JPMorgan served as financial advisor and Cleary Gottlieb Steen & Hamilton served as legal advisor to Synopsys. Evercore, Deutsche Bank, and Barclays acted as financial advisors to Clearlake and Francisco Partners. Sidley Austin acted as lead legal advisor to Clearlake and Francisco Partners. Simpson Thacher & Bartlett also advised Francisco Partners.
