Altair Announces Agreement to Acquire Datawatch

Altair and Datawatch Corporation have together announced the signing of a definitive merger agreement under which Altair has agreed to acquire Datawatch. Under the terms of the agreement, Altair will pay $13.10 per share in cash, representing a fully diluted equity value of approximately $176 million. The transaction was unanimously approved by the Boards of Directors of both companies.

James Scapa, Altair’s Founder, Chairman, and Chief Executive Officer, commented, “Bringing Datawatch into Altair should result in a powerful offering consistent with our vision to transform product design and decision making by applying Simulation, Data Science and Optimization throughout Product Lifecycles. We see a convergence of simulation with the application of machine learning technology to live and historical sensor data as essential to creating better products, marketing them efficiently, and optimizing their in-service performance. Datawatch is a great team of people with best-in-class products, and we look forward to their joining us.”

Altair believes the acquisition of Datawatch is compelling for a number of reasons, including —

The data analytics and data science markets are evolving rapidly to leverage many of the same technologies, such as high-performance computing and visualization, as Altair has been leveraging in simulation for many years.
Datawatch’s solutions, which include data prep, data prediction, and real-time high-volume data visualization technologies, are highly relevant and applicable to almost any company and vertical market.
There is a strong opportunity to cross-sell Datawatch products into Altair’s primarily manufacturing customer base, which will be facilitated by applying Altair’s proven licensing models to Datawatch solutions.
Datawatch’s historical strength has been in the financial services and capital markets sectors. There is a meaningful opportunity to disrupt these markets and expand usage by making it easier to access products through Altair’s licensing model, and there is a cross-sell opportunity with some relevant Altair products in these markets.

Michael Morrison, CEO at Datawatch, added, “The Datawatch team is excited to join Altair and benefit from its long track record of success with developing and bringing to market highly differentiated software technology across diverse industry verticals. We feel great about the cultural alignment and look forward to driving continued innovation in our market-leading solutions as an integral part of Altair’s vision.”

Terms of the Transaction

Under the terms of the definitive merger agreement, Altair will commence a tender offer within ten business days to acquire all of the outstanding shares of common stock of Datawatch for $13.10 per share in cash. This represents a 35% percent premium to the closing price of Datawatch’s common stock on November 2, 2018. The tender offer is subject to customary closing conditions, including the tender of at least a majority of the outstanding shares of Datawatch common stock and the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Following the closing of the tender offer, a wholly-owned subsidiary of Altair will merge with and into Datawatch, with each share of Datawatch common stock that has not been tendered being converted into the right to receive the same $13.10 per share in cash offered in the tender offer. The transaction is anticipated to close in the fourth quarter of 2018.

Funding for the transaction will come primarily from cash, coupled with the utilization of borrowings under Altair’s existing credit facility.

RBC Capital Markets, LLC is acting as an exclusive financial advisor to Altair. GCA Advisors is acting as an exclusive financial advisor to Datawatch. Legal counsel for Altair is Lowenstein Sandler LLP and legal counsel for Datawatch is Choate Hall & Stewart LLP.

Conference Call Details

Altair will host a conference call and webcast today, 5 November 2018, at 8:30 a.m. (Eastern Time), to discuss the details of the acquisition. Please note this call will only review today’s announcement. The Company will release and review its third quarter 2018 results in its regularly scheduled earnings conference call after the close of market on Thursday, 8 November 2018 at 4:30 p.m.

Currently, Altair transforms design and decision making by applying simulation, machine learning, and optimization throughout product lifecycles. Altair’s broad portfolio of simulation technology and patented units-based software licensing model enable Simulation-Driven Innovation^™ for Altair’s customers. With more than 2,000 employees, Altair is headquartered in Troy, Michigan, USA and operates 71 offices throughout 24 countries. Altair serves more than 5,000 customers across broad industry segments.

Altair Announces Agreement to Acquire Datawatch

Terms of the Transaction

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