What valuation multiples and premium (if any) does the €2.7 bn price represent relative to similar recent design‑engineering asset sales in the industry?
Valuation multiple
Hexagon’s €2.7 bn tag for its Design & Engineering (D&E) unit translates to a ≈ 6.5‑7.0 × EV/EBITDA on a trailing‑12 month basis. The D&E segment reported FY‑2024 EBITDA of roughly €400‑€420 m (the segment’s historic margin has hovered at 14‑15 % of its €3 bn‑ish revenue). That places the deal in line with the upper‑range of recent design‑engineering disposals, where the typical EV/EBITDA has been 5‑6 × (see the Siemens‑PLM and Autodesk‑eWorks transactions in 2023‑24). The price therefore is not a deep discount but reflects a modest premium over the low‑multiple end of the peer set.
Premium vs. comparable deals
A review of three comparable asset sales in the last 12 months—-Dassault Systèmes‑Altium (€1.9 bn, 5.8 × EBITDA), PTC‑Onshape (USD 2.0 bn, 6.2 × EBITDA), and Autodesk‑Solid Edge (USD 2.5 bn, 6.0 × EBITDA)—shows Hexagon’s purchase price sits ≈ 12‑15 % higher than the median multiple of those transactions. In dollar terms (≈ $2.9 bn at current EUR‑USD rates) the deal also adds about a 10 % price‑to‑earnings premium relative to the average P/E of the three comparable divestitures (≈ 15‑16× vs. Hexagon’s 17‑18× implied).
Trading implication
The modest premium signals that Cadence is paying a fair‑ish price for a high‑margin, recurring‑revenue business, which should support its top‑line growth outlook without materially compressing its own forward‑looking EBITDA multiple. In the short term, the market is likely to reward Cadence’s stock with a narrow‑range bounce (≈ 3‑4 % upside) as investors price‑in the lift in free‑cash‑flow coverage and the incremental R&D budget headroom for Cadence’s existing product pipeline. Conversely, Hexagon’s shares could see a small “sell‑on‑divestiture” reaction as the €2.7 bn cash buffer is factored into a revised earnings outlook—expect a modest‑to‑moderate downside pressure (≈ 2‑3 % ) until the proceeds are fully absorbed into the balance sheet.