Acquired Dotmatics, a pioneer in life science research and development software, for $5.1 billion
By extending AI driven Product Lifecycle Management (PLM) solutions to the field of life sciences, the seamless connection between research and manufacturing is achieved, further consolidating the company's advantages in the industrial software field
The total target market for Siemens digital industrial software will increase by $11 billion; Aligning with Siemens' strategic goal of accelerating innovation for cross industry clients
This acquisition is another milestone in Siemens' ONE Tech Company program, which aims to increase customer attention, accelerate innovation, and achieve higher growth by expanding the open digital business platform Siemens Xcelerator into the field of life science software
Siemens announced that it will acquire Dotmatics, a pioneer in life science research and development software headquartered in Boston, USA, from Insight Partners for $5.1 billion. This acquisition is another strategic milestone for Siemens, expanding its comprehensive digital twin technology and artificial intelligence (AI) empowered industrial software into the high growth market of life sciences. Dotmatics provides an advanced platform for life science research and development, with high-yield scientific applications and multimodal data management products that can help customers accelerate innovation, provide next-generation collaboration and contextualized data, and achieve AI driven multimodal drug development.
The acquisition of Dotmatics is Siemens' strategic layout in the field of life sciences. By integrating Dotmatics' research and development platform into Siemens Xcelerator, we will create a world leading AI driven PLM software solution. AI has become a key force for transformation in various industries, and its application in life sciences is becoming increasingly important Roland Busch, Chairman of the Board, President and CEO of Siemens AG, stated. This acquisition is also part of Siemens ONE Tech Company's growth plan, which will further enhance our advantageous position in the industrial software field and help our customers accelerate innovation
Ralf P. Thomas, Chief Financial Officer of Siemens AG, said, "The acquisition of Dotmatics will bring significant revenue synergies to Siemens, as the company not only has strong profitability but also excellent cash flow generation capabilities. The financing will mainly be raised through the sale of shares of listed companies, including Siemens Healthineers
Thomas Swalla, CEO of Dotmatics, said: "Dotmatics has achieved significant growth and business expansion in its partnership with Insight Partners, and we are delighted to join forces with Siemens to embark on a new chapter. Our next-generation scientific intelligence platform and scientific applications, combined with Siemens' digital twin technology and artificial intelligence capabilities, will drive a new round of innovation in life science research and development. We will work together to accelerate the innovation cycle of our customers, help scientists make breakthrough discoveries faster, and shape a new future of scientific innovation
The field of life sciences is a powerful supplement to Siemens software's existing market layout, expanding the total target market of Siemens digital industrial software by $11 billion. The field of life sciences is driven by structural changes, including the increasing demand for medicine brought about by an aging society, the improvement of drug accessibility, the emergence of new treatment options driven by technological progress, and the urgent need to strengthen cooperation and visibility in complex value chains. These trends highlight the necessity of digital transformation, and it is expected that software spending in this field will double in the next five years.
Siemens' expansion in the field of life sciences is consistent with the company's strategic goal of helping customers accelerate innovation in industries with the highest R&D expenditures. This acquisition is part of Siemens ONE Tech Company's plan and another milestone following Siemens' completion of the Altair acquisition. The ONE Tech Company growth plan will help Siemens further strengthen its market position and achieve higher levels of performance and value creation. Through ongoing acquisitions and continuous research and development investments in software, artificial intelligence products, connected hardware, and sustainable development, Siemens prioritizes capital allocation for strategic growth. The acquisition of Dotmatics enables Siemens to expand its technology into the life sciences field and fully leverage the growth opportunities in this market, combining comprehensive manufacturing expertise, industrial simulation, and artificial intelligence capabilities with Dotmatics' advanced complementary applications to create an end-to-end digital mainline that connects data from research to production in the life sciences field.
Acquisition brings significant synergies
Dotmatics is expected to achieve over $300 million in revenue in fiscal year 2025, with substantial profits, strong cash flow generation capabilities, and adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) exceeding 40%. Before generating synergies, the company's mid-term revenue growth and high profitability will immediately increase Siemens' growth, EBITDA margin, and free cash flow. Siemens expects to achieve significant revenue synergies: the medium-term revenue synergy is expected to be around $100 million per year, and in the long term it will increase to over $500 million per year.
According to customary transaction conditions and applicable regulatory approvals, the transaction is expected to be completed in the first half of the 2026 fiscal year. It is expected that the capital structure upon completion of the transaction will be within Siemens' target range.