Cadence Acquires Hexagon’s Design & Engineering Business to Expand Physical AI and System Design Capabilities

Cadence Design Systems has announced a definitive agreement to acquire the Design & Engineering (D&E) business of Hexagon AB, including its pioneering MSC Software division, a leading provider of engineering simulation and analysis solutions. The acquisition, which strengthens Cadence’s Intelligent System Design™ strategy, marks a major expansion of its System Design & Analysis portfolio. The deal is expected to close in the first half of 2025, subject to regulatory approvals and customary closing conditions. MSC Software, founded in 1973, has long been a key player in the engineering simulation space, offering advanced tools for finite element analysis (FEA), computational fluid dynamics (CFD), and multi-body dynamics. Its flagship products, such as MSC Nastran, MSC Adams, and MSC Apex, are widely used across industries including aerospace, automotive, defense, and manufacturing. These tools enable engineers to simulate real-world physical behaviors—such as stress, vibration, and thermal performance—before building physical prototypes, reducing development time and costs. By integrating MSC Software’s capabilities into its existing platform, Cadence aims to deliver a more comprehensive, end-to-end solution for designing complex electronic and mechanical systems. The acquisition will enhance Cadence’s ability to support the convergence of electronics, software, and mechanical engineering—critical for emerging technologies like autonomous vehicles, smart infrastructure, and advanced robotics. The expanded portfolio will allow customers to analyze system-level performance earlier in the design cycle, improving reliability and accelerating time-to-market. Cadence’s Intelligent System Design™ vision focuses on enabling engineers to create smarter, more integrated systems by unifying design, simulation, and analysis across hardware, software, and packaging. The addition of MSC Software’s simulation expertise will deepen Cadence’s capabilities in system-level modeling and verification, particularly for mixed-domain systems where electrical, mechanical, and thermal factors interact. The acquisition also reflects a broader trend in the EDA (Electronic Design Automation) and simulation software industries: the integration of multidomain engineering tools to meet the demands of increasingly complex systems. As devices become more interconnected and intelligent, the need for tightly integrated design and simulation workflows grows. Cadence’s move positions it as a leader in enabling holistic system design, particularly for industries where safety, performance, and efficiency are paramount. Hexagon AB, a global technology company with a strong presence in geospatial, industrial, and engineering solutions, will retain its other business units, including its Geospatial and Manufacturing Intelligence divisions. The D&E business, which includes MSC Software, will be fully integrated into Cadence’s operations following the close of the transaction. The deal underscores Cadence’s commitment to innovation and growth through strategic acquisitions. It builds on Cadence’s recent expansion into system-level design, including its acquisition of Sigrity and the development of its Palladium and Protium platforms for hardware verification. With the addition of MSC Software’s robust simulation tools, Cadence will offer a more cohesive ecosystem that supports the entire product development lifecycle—from concept to deployment. The acquisition is expected to be accretive to Cadence’s revenue and earnings over time, and the company plans to maintain MSC Software’s global customer base and support infrastructure. Cadence also intends to invest in further innovation, combining MSC’s simulation technologies with Cadence’s AI-driven design tools to deliver smarter, faster, and more accurate system design solutions. In summary, Cadence’s acquisition of Hexagon’s D&E business is a transformative step in its evolution from an EDA provider to a full-stack system design platform. It strengthens Cadence’s ability to serve the growing demand for integrated, intelligent system design—particularly in high-tech industries where performance, safety, and speed are critical. As the boundaries between electronics, software, and mechanical systems blur, this move positions Cadence at the forefront of the next generation of engineering innovation.