Cadence to use debt financing for BETA CAE Systems purchase

By Sara Rosenberg

New York, March 5 – Cadence Design Systems Inc. plans to use borrowings under existing and/or new debt facilities and cash on hand to fund the cash portion price of its acquisition of BETA CAE Systems International AG, according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

The company intends to use free cash flow generated by its existing operations to rapidly pay down debt incurred to fund the transaction, while also maintaining share repurchases.

Under the agreement, Cadence will pay about $1.24 billion for the transaction, with 60% of the consideration to be paid in cash and 40% to be paid through the issuance of Cadence common stock to current BETA CAE shareholders.

Closing is expected in the second quarter, subject to regulatory approvals and other customary conditions.

Cadence is a San Jose, Calif.-based designer of electronic systems. BETA CAE is a Lucerne, Switzerland-based system analysis platform provider of multi-domain, engineering simulation solutions.

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