Synopsys selling part of its IT business to Clearlake and Francisco for $2.1 billion

Synopsys is set to offload its Software Integrity (SIG) division to a private equity consortium led by Clearlake Capital and Francisco Partners for $2.1 billion. This division offers application security testing services to software developers. The deal, reported by Reuters, follows a successful bid by private equity firms over other contenders for SIG's division.

As part of the agreement, up to $475 million in cash will be paid upon achieving specific profit milestones tied to future liquidity transactions. These transactions involve the sale of company shares, allowing shareholders, including employees, to liquidate their holdings.

The decision to divest the SIG division was announced by Synopsys at the close of 2023. Earlier this year, Synopsys finalized a deal to acquire competitor software firm Ansys for $35 billion, marking its largest acquisition to date.

The sale of SIG is anticipated to conclude in the latter half of 2024, resulting in the formation of a new independent entity specializing in application security testing software. The name of this entity will be disclosed at a later date.

Despite the transaction, reports indicate that Synopsys will maintain its presence in Armenia, and the deal is not expected to impact its operations there.