Acquisition chain: Renesas buys Altium buys Valispace
As I have already reported on Valispace several times on these pages, you will probably be interested to know that Valispace has just been taken over by Altium. That in itself is interesting. The fact that Renesas announced the takeover of Altium a month ago makes the whole thing even more interesting.
How high the purchase price was, what the background is and what this means for systems engineering, that's what we're talking about today.
The hard figures
Valispace sells a SaaS tool for model-based hardware development and was founded in 2018. I noticed the tool a few years ago because it uses modeling very effectively, but with a focus on components, not (sub)systems. This approach enables very efficient implementation for certain use cases. Altium pays $19.97 million for Valispace.
Altium: PCB design from Australia
The deal between Altium and Renesas is in a completely different league: the two companies have been working together for some time and are both listed on the stock exchange. Renesas is paying almost 6 billion US dollars via a share purchase (AUD 8.8 billion) for Altium. Altium is an Australian company that is almost 40 years oldwhich sells software for all PCB-related work. The acquisition has only just begun and is expected to be completed in the second half of 2024.
Altium has probably been an acquisition target for some time: in particular, Autodesk tried to buy the company back in 2021, at the time for around AUD 5. The wait was obviously worth it.
Renesas: From semiconductor to component
Renesas is a Japanese semiconductor company with a market capitalization of approx. 30 billion US dollars. It is easy to see how their business fits in with Altium: After all, they manufacture the components that are used to assemble printed circuit boards.
This also gives us an idea of where the journey will take us: Renesas is probably pursuing a "bottom-up" strategy. Almost every modern system contains electronic components. I would assume that Renesas will try to master the vertical electronics strand.
Renesas appears to be pursuing a "bottom-up" strategy with the aim of dominating the vertical electronics string
If this assumption is correct, it could explain why Altium rejected the takeover by Autodesk: Instead of expanding an existing vertical line like Renesas, Autodesk may have tried to open up a new vertical line. The three strands are mechanics, software and electrics/electronics.
Autodesk is well established in the field of mechanics (see also: What the parallel development of hardware and software means for systems engineers). A step in the direction of the electronics string would make perfect sense.
Implications for systems engineering
In systems engineering, we deliberately do not deal with one of the three strands of mechanics, software and electronics. Instead, systems engineering holds these strands together to enable the development of a complex product.
This brings us back to Valispace: Valispace is based on a component mindset, not a system mindset. Nevertheless, it introduces aspects of systems engineering into development through systematic decomposition. This mindset fits very well with the bottom-up approach that Altium and Renesas are probably pursuing.
I see this approach even more strongly at PTC. The acquisitions in recent years of Onshape, Codebeamer and Pure Variantscombined with the existing product portfolio, suggest a similar goal.
Conclusion
The double acquisition of Valispace/Altium indicates that Renesas wants to cover the "electronics" vertical pillar in product development as fully as possible. This is certainly a lucrative market. However, the mechanical and software pillars are not included. This means that Renesas' product development offering is incomplete. The exciting question is whether Renesas will also include these pillars in its portfolio in the medium term, or whether Renesas could even become the target of an acquisition as a result.
