On May 6, Synopsys announced that it had reached a final agreement with Clearlake Capital Group and Francisco Partners to sell its Software Integrity Group (SIG) division for a transaction value of up to $2.1 billion. After the transaction is completed, the business will become a new independent application security testing software provider.

Synopsys' software products are used by engineers to design and test chips used in everything from smartphones to self-driving cars and other forms of artificial intelligence, while SIG offers a portfolio of software security products and services that can help software developers with application security testing.

The transaction has been approved by Synopsys' board of directors and is expected to close in the second half of this year, subject to closing conditions, including receipt of required regulatory approvals. Upon closing, the existing SIG management team is expected to lead the new independent private company. The name of the new independent entity will be announced later.

"Clearlake and Francisco Partners have a strong track record of success in investing in evolving software platforms and are ideal partners to continue to grow this business as an independent, world-class software security provider," said Sassine Ghazi, president and CEO of Synopsys. "For Synopsys, this move sharpens our focus on unprecedented high-growth opportunities in our core business - where silicon and systems engineering are converging as technology R&D teams seek to capitalize on this era of pervasive intelligence driven by AI."

Synopsys announced plans to spin off the SIG unit in late 2023; in January, Synopsys agreed to acquire rival design software company Ansys for $35 billion in one of the largest acquisitions in recent tech years. The acquisition is expected to be completed in the first half of 2025, but the completion of the transaction is subject to the approval of Ansys shareholders, necessary regulatory approvals and other customary closing conditions. It is reported that Synopsys and Ansys have highly complementary businesses and significant expansion opportunities. The merger will enhance Synopsys' chip-to-system strategy in the core EDA field, as well as attractive growth areas such as automotive, aerospace and industry, where Ansy has mature businesses and successful market experience.

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