Cadence Design Systems (NASDAQ:CDNS) has completed its acquisition of Hexagon AB’s Design and Engineering (D&E) business, the company announced Monday, marking its largest move to date into the burgeoning field of Physical AI.
The deal, valued at approximately €2.7 billion ($2.85 billion), was settled with a mix of 70% cash and 30% Cadence common stock.
The acquisition brings Hexagon’s flagship MSC Software suite—including industry standards MSC Nastran and Adams—under the Cadence umbrella.
The integration significantly expands Cadence’s System Design and Analysis (SDA) portfolio.
By combining its existing computational fluid dynamics (CFD) and electronic design automation (EDA) tools with Hexagon’s expertise in structural analysis, acoustics, and multibody dynamics, Cadence aims to offer a unified multiphysics platform.
The move positions Cadence to capitalize on "Physical AI"—the practice of using high-fidelity, physics-based simulations to train AI agents in virtual environments before deploying them into the real world.
This capability is increasingly critical for the development of humanoid robots and self-driving vehicles, where digital twins must accurately predict complex vibration and fluid-structure interactions.