February 15, 2024

TOKYO, Japan, February 15, 2024 ― Renesas Electronics Corporation (“Renesas”, TSE: 6723), a supplier of advanced semiconductor solutions, today announced it has reached an agreement with Altium Limited (“Altium”, ASX: ALU), a global leader in electronics design systems, in which Renesas will acquire all outstanding shares of Altium, making Altium a wholly-owned subsidiary of Renesas, subject to satisfaction of certain conditions (the “Acquisition”).

The acquisition will be executed by way of a Scheme of Arrangement ("SOA") under the Australian Corporations Act, which is a method of acquiring 100% of the outstanding shares of an Australian listed company and will involve the acquisition of all of Altium's shares for cash. The companies have entered into a Scheme Implementation Agreement (“SIA”) which has been unanimously approved by the boards of directors of both companies.

The acquisition is expected to be completed in the second half of 2024, subject to approval by Altium shareholders, Australian court approval as well as regulatory approvals and satisfaction of other customary closing conditions.

1. Purpose of the Acquisition 

Under its Purpose, "To Make Our Lives Easier," Renesas has been expanding its product portfolio of embedded processors, analog, power, and connectivity, with an aim to becoming a global leader in embedded semiconductor solutions. Furthermore, Renesas has been advancing its digitization strategy that enables enhanced user experience (UX) through cloud-based development.

As technology advances, the design and integration of electronic systems is becoming increasingly complex. The current electronics system design flows are a complicated and iterative process that involves multiple stakeholders and design step, from component selection and evaluation to simulation and PCB physical design. Engineers must be able to design systems that are not only functional butalso efficient and cost-effective under shortened development cycles. 

Altium’s history began in 1985 from Australia as the world’s first printed-circuit board (PCB) design tool provider. The company has grown into a global market leader with the most well-known PCB software tools in use today. 

The acquisition enables two industry leaders to join forces and establish an integrated and open “electronics system design and lifecycle management platform” that allows for collaboration across component, subsystem, and system-level design. The transaction strongly aligns with Renesas’ digitalization strategy and represents the company’s first significant step in bringing enhanced user experience and innovation at the system level for electronics system designers.

Together, Renesas and Altium, under a shared vision, aim to build an integrated and open electronics system design and lifecycle management platform that unifies these steps at a system level. The acquisition brings together Altium’s sophisticated cloud platform capabilities with Renesas’ strong portfolio of embedded solutions, combining high-performance processors, analog, power and connectivity. The combination will also enable integration with third-party vendors across the ecosystem to execute all electronic design steps seamlessly on the cloud. The electronics system design and lifecycle management platform will deliver integration and standardization of various electronic design data and functions and enhanced component lifecycle management, while enabling seamless digital iteration of design processes to increase overall productivity. This brings significantly faster innovation and lowers barriers to entry for system designers by reducing development resources and inefficiencies. 

The acquisition strengthens Renesas’ financial profile and provides shareholders significant value by accelerating our digitalization strategy. The transaction is immediately accretive to earnings without synergies; the combined company expects to achieve earnings impact from revenue and cost synergies after the completion of the transaction. 

Altium brings US$263 million revenue, 36.5% EBITDA margin, and 77% recurring revenue. These figures are based on Altium’s fiscal year ended June 30, 2023.

2. Scheme of the Acquisition

The acquisition will be executed by way of a SOA. Upon approval of the Acquisition Proposal at a shareholder meeting of Altium (approval by a majority of the shareholders present and voting and by a minimum of 75% of votes cast), approval by the Australian courts, and necessary regulatory approvals being obtained from the authorities in relevant countries, and subject to satisfaction of certain other conditions, Renesas (or, a wholly owned subsidiary) will acquire all of the outstanding shares of Altium.

Renesas will acquire shares of Altium for a cash price of A$68.50 per share, (total equity value of approximately A$9.1 billion (approximately ¥887.9 billion at an exchange rate of 97 yen to the A$). Renesas plans to finance the transaction with bank loans and cash on hand.

ProcessExpected Timing
First Court Hearing at the Australian courtFirst half of 2024 (expected)
Altium General Shareholders ApprovalSecond half of 2024 (expected)
Second Court Hearing at the Australian courtSecond half of 2024 (expected)
SOA Effective DateSecond half of 2024 (expected)

Implementation Date of Scheme of Arrangement

(Date of acquisition of Altium shares)

Second half of 2024 (expected)

(Note) The above date is subject to change upon the discussion among the parties depending on the status of obtaining necessary approvals from regulatory authorities.

3. Overview of Subsidiaries to be Transferred

 Overview of Altium

(1)NameAltium Limited (ASX: ALU)
(2)Address4225 Executive Square, Level 7, La Jolla, CA 92037, USA
(3)Name and title of representative directorCEO: Aram Mirkazemi
(4)Type of businessDevelopment and sales of software tools for PCB design, etc.
(5)Capital 127,699 thousand US$
(6)EstablishedOctober, 1987
(7)Major shareholders and their ownership ratios (As of August 31, 2023) 

HSBC Custody Nominees (Australia) Limited

JP Morgan Nominees Australia Pty Limited

Citicorp Nominees Pty Limited

Mr Aram Mirkazemi + Mrs Lailani Mirkazemi <Family A/C>

National Nominees Limited

35.15%

15.33%

10.67%

5.10%

3.70%

(8)Relationship between Renesas and Altium Capital relationshipThere are no relevant capital relations between Renesas and Altium.
Personnel relationshipThere are no relevant personal relationship between Renesas and Altium.
Transactional relationship There is a transactional relationthip between Renesas and Altium regarding the usage of Altium’s software tools.
(9)Consolidated business performance and consolidated financial status of past 3 years
Accounting PeriodFY2021/6FY2022/6FY2023/6
Consolidated net assets255.9 million US$274.9 million US$304.2 million US$
Consolidated total assets383.2 million US$381.5 million US$427.2 million US$
Consolidated net assets per share1.95 US$2.09 US$2.31 US$
Consolidated revenue180.2 million US$220.8 million US$263.3 million US$
Consolidated operating profit48.1 million US$67.9 million US$86.4 million US$
Consolidated net profit107.0 million US$55.3 million US$66.3 million US$
Consolidated net profit per share 0.82 US$0.42 US$0.50 US$
Dividends per share0.40 A$0.47 A$0.54 A$
        

(Note) Renesas is also acquiring Altium LLC, Altium IP Co. Pty Ltd., Altium IP Hold Co. Pty. as three consolidated subsidiaries (specified subsidiaries) of Altium (Altium Limited). Detailed information of each subsidiary will be provided once available.

4. Number of Shares Acquired, Acquisition Price and Ownership Before and After Acquisition

(1)Shares owned before transfer

0 shares

(Number of shares with voting rights: 0 shares)

(Ownership percentage: 0.0%)

(2)Number of shares acquired

133,279,432 shares (Note)

(Number of shares with voting rights:133,279,432 shares)

(Percentage of outstanding shares:100.0%)

(3)Acquisition price

Approximately $A9.1billion

(approximately ¥887.9 billion at an exchange rate of 97 yen to the A$)

Advisory fee, etc. (estimated amount): Approximately A$19 million (approximately ¥1.8 billion)

(4)Shares acquired after transfer

133,279,432 shares (Note)

(Number of shares with voting rights:133,279,432 shares)

(Ownership percentage:100.0%)

(Note) Based on the number of shares on a fully-diluted basis as of today (reflecting dilutions, etc., that occurred following the stock-related compensation from the said acquisition.) Above figures have been rounded off to the closest whole number.

5. Schedule

Renesas Board approvalFebruary 15, 2024
Altium Board approvalFebruary 15, 2024 (AEDT)
SIA executionFebruary 15, 2024

Implementation Date of Scheme of Arrangement

(Date of acquisition of Altium shares)

Second Half of 2024 (to be scheduled)

6. Future Outlook

If the acquisition completes, Altium will become a consolidated subsidiary of Renesas. The impact on the consolidated performance of Renesas will be disclosed in a timely manner as the acquisition proceeds.

(Note) Figures in this press release are calculated at the rate as of February 14, 2024: 151 yen per U.S. dollar and 97 yen per Australian dollar.

About Renesas Electronics Corporation

Renesas Electronics Corporation (TSE: 6723) empowers a safer, smarter and more sustainable future where technology helps make our lives easier. The leading global provider of microcontrollers, Renesas combines our expertise in embedded processing, analog, power and connectivity to deliver complete semiconductor solutions. These Winning Combinations accelerate time to market for automotive, industrial, infrastructure and IoT applications, enabling billions of connected, intelligent devices that enhance the way people work and live. Learn more at renesas.com. Follow us on LinkedInFacebookXYouTube, and Instagram.

Cautionary note regarding forward-looking statements

This announcement may contain certain statements that are, or may be deemed to be, forward-looking statements with respect to the financial condition, results of operations and business of Renesas and/or Altium and/or the combined group following completion of the Acquisition and certain plans and objectives of Renesas with respect thereto.  These forward-looking statements can be identified by the fact that they do not relate to historical or current facts. Forward-looking statements also often use words such as ‘anticipate’, ‘target’, ‘continue’, ‘estimate’, ‘expect’, ‘‘forecast’, ‘intend’, ‘may’, ‘plan’, ‘goal’, ‘believe’, ‘hope’, ‘aims’, ‘continue’, ‘could’, ‘project’, ‘should’, ‘will’ or other words of similar meaning.  These statements are based on assumptions and assessments made by Renesas and/or Altium (as applicable) in light of their experience and perception of historical trends, current conditions, future developments and other factors they believe appropriate.  By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward-looking statements in this announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct and you are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of this announcement. 

Forward-looking statements are not guarantees of future performance.  Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions.  Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements.  Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this announcement.  Neither Renesas nor Altium undertakes any obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by applicable law.

There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements.  Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in the global, political, economic, business and competitive environments, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions.  If any one or more of these risks or uncertainties materializes or if any one or moreof the assumptions prove incorrect, actual results may differ materially from those expected, estimated or projected. Such forward looking statements should therefore be construed in the light of such factors.

No member of the Renesas group or the Altium group nor any of their respective associates, directors, officers, employers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur.

Except as expressly provided in this announcement, no forward-looking or other statements have been reviewed by the auditors of the Renesas group or the Altium group.  All subsequent oral or written forward-looking statements attributable to any member of the Renesas group or the Altium group, or any of their respective associates, directors, officers, employers or advisers, are expressly qualified in their entirety by the cautionary statement above.

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(Remarks) All registered trademarks or trademarks are the property of their respective owners. 

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