(Reuters) - Simulation software maker Ansys Inc (ANSS.O) said it would buy privately held rival Apache Design Solutions in a deal valued at $310 million, arming itself with software to design energy-efficient electronic devices.
The market for devices such as tablets, smartphones and LCD screens is red hot, but a key challenge for manufacturers is to design products that sip less power.
Ansys makes software that help architects and designers simulate the design of cars, planes and buildings on a desktop and the acquisition is its biggest since it bought Ansoft Corp for about $832 million in 2008.
San Jose, California-headquartered Apache had filed for an initial public offering of $75 million in March.
The purchase price includes about $29 million in cash on Apache’s balance sheet and the agreement includes an additional $13 million of performance equity awards payable to Apache’s employees.
Ansys, which competes with Parametric Technology Corp PMTC.O and Autodesk Inc (ADSK.O), intends to fund the transaction with cash on-hand and the deal is expected to close in the third quarter of 2011.
BofA Merrill Lynch advised Ansys on the deal while Deutsche Bank Securities advised Apache.
Shares of Ansys were up slightly at $55.20 in trading before the bell. They closed at $54.98 Wednesday on Nasdaq.
Reporting by Sayantani Ghosh and Bijoy Koyitty in Bangalore; Editing by Savio D'Souza