Altair Announces Agreement to Acquire Datawatch

Altair and Datawatch 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.

“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,” James Scapa, Altair’s founder, chairman and chief executive officer, comments. “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.”

Altair sees the following as benefits regarding the acquisition of Datawatch:

Datawatch’s solutions, which include data prep, data prediction and real-time high-volume data visualization technologies, are applicable to almost any company and vertical market.

There is opportunity to cross-sell Datawatch products into Altair’s primarily manufacturing customer base, which will be facilitated by applying Altair’s licensing models to Datawatch solutions.

Datawatch’s historical strength has been in the financial services and capital markets sectors. There is 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 Altair products in these markets, according to Altair.

“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,” says Michael Morrison, chief executive officer of Datawatch. 

Terms of the Transaction

Under the terms of the definitive merger agreement, Altair will commence a tender offer within 10 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 utilization of borrowings under Altair’s existing credit facility.

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

Sources: Press materials received from the company.

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