(Reuters) -Synopsys said on Monday it would sell its software integrity (SIG) unit to a private-equity group led by Clearlake Capital and Francisco Partners in a $2.1 billion deal, as it shifts its focus towards the AI chips market.
Last week, Reuters reported the group had outbid competitors for the SIG unit. It’s now in advanced discussions for purchasing, providing application security testing for software developers.
Synopsys CEO Sassine Ghazi said the move sharpens the company’s focus on its core chip design business. It would help capitalize on the “AI-driven era.”
The company helps firms such as Nvidia in determining the arrangement of hundreds of billions of transistors on small silicon squares.
The deal includes up to $475 million in cash that will be payable once the buyout firms hit certain milestones related to the deal.
In late 2023, Synopsys revealed plans to divest its SIG unit. In January, it agreed to acquire rival design software firm Ansys for $35 billion, marking its largest-ever deal.
The SIG deal is set to conclude in the latter half of 2024, forming a new entity focused on application security testing software.
The company said it would release the name of the new business at a later date.
Shares of Synopsys were up 1% in early trading.
The Synopsys software sale signifies a strategic realignment in the company’s focus and operations. By divesting its software unit, Synopsys aims to streamline its business portfolio and concentrate on core competencies.
Furthermore, the Synopsys software sale is anticipated to have far-reaching implications for the technology industry. This transformative deal is poised to reshape the competitive landscape and redefine market dynamics.
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