Aavid Thermal Technologies Inc., a developer of computational fluid dynamics (CFD) software and provider of thermal management solutions for electronics, has agreed to be acquired by Ansys, a global innovator of simulation software and technologies designed to optimize product development processes.
Before the deal closes, Aavid's thermal management solutions business (Aavid Thermalloy) will be spun off to the company's stockholders, including Willis Stein & Partners, a leading Chicago-based private investment firm and the company's controlling stockholder. Aavid Thermalloy will continue operating as a standalone business.
Ansys will issue 6 million shares of its common stock and pay approximately $300 million, net cash, to the stockholders of the company and certain of its affiliates, subject to certain adjustments at closing. The transaction is estimated at $565 million based on the $44.11 per share closing price of Ansys common stock on Feb. 15. Ansys will use a combination of existing cash and about $200 million from committed bank financing to fund the transaction, including repayment and redemption at closing of the company's outstanding senior and subordinated debt.
The operating business to be acquired by Ansys is comprised of Fluent Inc. and its subsidiaries, a global supplier of CFD software technologies and services. Fluent's offerings enable engineers and designers to simulate fluid flow, heat and mass transfer, and related phenomena involving turbulent, reacting, and multiphase flow and are used by blue-hip companies, small and medium-sized enterprises and academic institutions around the world.
CFD simulation technology is used in almost every industry sector and manufactured product. CFD technology represents the fastest-growing application in the computer aided engineering (CAE) industry, with an 18% growth rate estimated through 2009 as forecasted by Daratech Inc.
Aavid Thermalloy is a global provider of thermal management solutions that dissipate unwanted heat from microprocessors and industrial electronics worldwide, including heat sinks, interface materials and attachment accessories, heat spreaders and liquid cooling and phase change devices that are configured to meet customer-specific needs.
Both companies' boards of directors have approved the transaction. The deal is anticipated to close early in the second quarter of 2006.
Aavid also announced preliminary and unaudited operating results for its fourth quarter and fiscal year ended Dec. 31, 2005. For the fourth quarter of 2005, the company's total sales were $68.1 million, or $8.8 million higher than the $59.3 million in sales for the fourth quarter of 2004. Sales for the company's software subsidiary, Fluent Inc., were $32.1 million, or 13.2% higher than the $28.4 million in sales reported for the fourth quarter of 2004. Fourth-quarter sales for Aavid Thermalloy totaled $36 million, or 16.6% higher than the $30.9 million in sales reported for the fourth quarter of 2004.
Aavid Thermalloy experienced a fourth-quarter operating loss of $0.6 million, compared to operating income of $1.5 million reported for the fourth quarter of 2004.
