Cadence Design Systems, Inc. (CDNS Quick QuoteCDNS - Free Report) , a leader in the electronic design automation (“EDA”) space, continues to enhance its business through strategic acquisitions.

Inorganic expansion provides valuable tools, technologies and market access that accelerate organic growth. This strategy increases a company’s product offerings without having to develop them from scratch. Acquiring companies with strong research and development capabilities allows an organization to speed up its innovation process. Buyouts aid in obtaining synergies, leading to cost reduction and enhanced operational efficiency through the integration of resources.  

CDNS’ M&A strategy is a necessary response to the explosive demand for AI-driven custom chips and the blurring lines between electronic, mechanical, and physical domains in next-generation designs.

AI is driving a transformation in semiconductor and system design and CDNS is integrated into this shift. Secular growth drivers such as 5G, the rise of hyperscale computing and autonomous vehicles are further fueling design activity across the semiconductor and systems landscape. Cadence's inorganic strategy is the calculated execution of its Intelligent System Design vision.

2025: Expanding System Design & Analysis and IP Portfolio

In September, CDNS signed a definitive agreement to acquire the Design & Engineering (D&E) division of Hexagon AB, including its renowned MSC Software business, in a deal worth €2.7 billion.

By integrating Hexagon’s proven technology and expertise, Cadence will strengthen its System Design & Analysis portfolio and extend its presence in the multi-billion-dollar structural analysis market, building on the earlier acquisition of Beta CAE in 2024. Hexagon’s D&E division generated approximately $280 million in 2024 revenues and employs more than 1,100 experts worldwide in R&D, sales and support, with strong ecosystem partnerships.

This acquisition will expand Cadence’s reach to top-tier aerospace and automotive clients, including Boeing, Lockheed Martin, BAE, Volkswagen, BMW and Toyota, who rely on Hexagon D&E’s solutions for mission-critical workflows that ensure structural integrity, vehicle dynamics and system reliability. This comes at a critical time as industries pivot toward electric vehicles, autonomous technologies and advanced materials. Pending regulatory approvals and customary closing conditions, the transaction is expected to be finalized in the first quarter of 2026.

Before that, Cadence signed a definitive agreement with Arm Holdings in April 2025 to acquire its Artisan foundation IP business. In January 2025, Cadence inked a definitive agreement to acquire Secure-IC, a premium provider of embedded security IP platforms.

The Secure-IC buyout will enable the company to enhance its capabilities in delivering cutting-edge security solutions for complex system-on-chip and silicon solutions across diverse industries.

Other Important Acquisitions for CDNS

Cadence’s acquisition of Switzerland-based BETA CAE, a leading provider of multi-domain, engineering simulation solutions, is one of its important buyouts. BETA CAE has broadened the multiphysics system analysis offerings, helping it enter the structural analysis sector.

In 2022, Cadence’s purchase of OpenEye Scientific Software brought computational molecular simulation capabilities leveraged by pharmaceutical and biotechnology companies for drug discovery — opening a new vertical in drug discovery.

The buyouts of Future Facilities, Pointwise and NUMECA have aided in increasing the system analysis portfolio with more CFD solutions. The other significant acquisitions made by the company include Integrand Software, AWR Corporation, Tensilica and InspectAR Augmented Interfaces.

Acquisitions Strategy Has Drawbacks

Overall, while buyouts can be a sound strategy, they come with their own set of drawbacks, like integration challenges. Acquisitions affect the balance sheet in the form of high levels of goodwill and intangible assets, adding to the risk of investing in the company. The company’s goodwill and intangible assets totaled $3.2 billion or 33.9% of total assets as of June 30, 2025.

Overall, Cadence’s acquisition strategy seems to be headed in the right direction. Through acquisitions, the company is solidifying its foothold in the EDA space amid intensifying competition  from Siemens EDA, Synopsys (SNPS Quick QuoteSNPS - Free Report) , Keysight Technologies (KEYS Quick QuoteKEYS - Free Report) and CEVA Inc (CEVA Quick QuoteCEVA - Free Report) .

Quick Look at Recent Acquisitions for Peers

The acquisition of ANSYS by Synopsys is likely to intensify competition in the EDA space for all players. SNPS completed the acquisition of ANSS in July 2025, creating a combined leader in silicon design, IP, and simulation and analysis.

To stay competitive amid changing industry dynamics, Keysight Technologies, a leading provider of electronic design and test instrumentation systems, is focused on inorganic expansion. In October 2025, KEYS acquired Spirent Communications plc for £1.16 billion (approximately $1.46 billion) on a fully diluted basis. Spirent offers automated test and assurance solutions for networks and cybersecurity.

CEVA has not acquired any companies this year and is focused on organic expansion. It continues to scale its AI business. On the last earnings call, CEVA highlighted that its AI NPU portfolio (NeuPro-Nano and NeuPro-M) is entering the "broad adoption phase," securing strategic deals across diverse sectors, including audio, smart displays and cloud AI-inference acceleration platforms. CEVA sold its Intrinsix Corporation business to Cadence in 2023.