Siemens Buys Design Automation Company Mentor Graphics

German engineering company Siemens is purchasing Wilsonville, OR-based Mentor Graphics, a maker of design automation software, for $4.5 billion to increase its strength in the industrial software market, the companies announced in a joint press release Monday.

“Siemens is acquiring Mentor as part of its Vision 2020 concept to be the Benchmark for the New Industrial Age. It’s a perfect portfolio fit to further expand our digital leadership and set the pace in the industry,” said Siemens AG President and Chief Executive Officer Joe Kaeser in a statement.

Mentor, which has 14,000 global client accounts in industries ranging from consumer electronics to transportation, will become a part of the German company’s Siemens Digital Factory (DF) division. Siemens said it expects Mentor to contribute revenue to its Product Lifecycle Management (PLM) software business. The Oregon company generated revenue of $1.2 billion in the fiscal year that ended on Jan. 31, 2016.

“With Mentor, we’re acquiring an established technology leader with a talented employee base that will allow us to supplement our world-class industrial software portfolio. It will complement our strong offering in mechanics and software with design, test, and simulation of electrical and electronic systems,” said member of Siemens’ managing board Klaus Helmrich.

The software company is considered a leader in IC design, test and manufacturing, electronic systems design and analysis, and emerging markets like automotive electronics, the press release said. About 5700 employees work for Mentor worldwide.

“Combining Mentor’s technology leadership and deep customer relationships with Siemens’ global scale and resources will better enable us to serve the growing needs of our customers, and unlock additional significant opportunities for our employees,” said Walden C. Rhines, Mentor’s chairman and chief executive officer. “Siemens is an ideal partner with financial depth and stability, and their resources and additional investment will allow us to innovate even faster and accelerate our vision of creating top-to-bottom automated design solutions for electronic systems.”

Siemens said it expects the transaction to close by the second quarter of 2017. 

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