bought by msc for $18.85/sh.
--wsun
Monday March 18, 5:53 pm Eastern Time
MSC Software to buy Mechnical Dynamics for $120 mln
(UPDATE: Adds comments, details, closing stock prices, byline)
By Sinead Carew
NEW YORK, March 18 (Reuters) - No. 1 simulation software maker MSC.Software Corp. (NYSE:MNS - news) said on Monday it would buy rival Mechanical Dynamics Inc. (NasdaqNM:MDII - news) for $120 million, in a deal that expands its product offerings and customer base.
MSC makes simulation software for the design and testing of manufactured goods, including the aerospace industry.
Mechanical Dynamics, whose strength is in the automotive market, makes software for building and testing virtual prototypes of complex mechanical designs.
Under the all-cash deal, shareholders of Ann Arbor, Michigan-based Mechanical Dynamics will get $18.85 a share, a 57 percent premium over Friday's closing price of $12.01 on Nasdaq.
Mechanic Dynamics stock shot up $6.67, or 55.5 percent, to $18.68 on Nasdaq on Monday. MSC rose $1.03, or 5.16 percent, to $21.01 on the New York Stock Exchange.
The deal is expected to close in the second quarter.
``MSC is gaining a broader product offering. The virtual prototype will complement its own simulator,'' said Asish Thadhani, an analyst from Brean Murray & Co. ``It will also expand its new accounts by 1,000.'' That would bring MSC's accounts to more than 10,000, he said.
MSC makes software that tests designs for structural strain, while Mechanical Dynamics' products test for strength in motion. MSC's biggest rivals in the simulation market include computer services giant EDS Corp. (NYSE:EDS - news) and Ansys Inc. (NasdaqNM:ANSS - news).
The combined company will be the first to offer both technologies, said Michael Korybalski, chairman and chief executive of Mechanical Dynamics.
``We've collaborated a lot in the past. Our customers will see us move into higher product integration,'' Korybalski told Reuters in an interview.
The integration of the two companies should take place over the next 12 months, Korybalksi said.
He said the companies have very little product overlap and that there would not be many layoffs as a result of the merger. He could not give more detail.
Earlier this month, Santa Ana, California-based MSC posted a 14 percent rise in fourth-quarter earnings, and said it would meet Wall Street expectations in the first quarter and fiscal year.
Credit Suisse First Boston acted as financial adviser to Mechanical Dynamics. Needham & Co. was the adviser to MSC.Software. |
