New York, Feb 24, 2026, 05:40 EST — Premarket
- Cadence shares head into Tuesday following a steep drop in the previous session.
- The latest SEC filing spells out the stock issued to finalize the Hexagon Design & Engineering acquisition.
Cadence Design Systems shares took a hit Monday, dropping 5.6% to finish at $279.80, as investors digested news of the company closing its acquisition of Hexagon’s design-and-engineering unit with a fresh stock issuance. The move pushes Cadence further out of its core chip tools niche and into the industrial simulation space. (Sec)
Why this matters: The acquisition is big—big enough to shift the numbers. It hits right as investors are nervous about lofty software valuations and wary of dilution. Cadence isn’t just pitching a chip-cycle angle here; it’s putting an integration narrative front and center for the market.
The filing brings up a pressing mechanical problem for shareholders: the float gets bigger, regardless of whether the deal’s strategic reasoning stays solid.
Cadence disclosed in its Form 8-K that it handed over 3,224,473 shares of common stock to Hexagon’s seller entity as part of the purchase price for the deal. The company called this an unregistered sale of equity securities, clarifying that the shares were issued privately and weren’t registered for public resale at issuance. (Sec)
Cadence put the deal’s value at roughly 2.7 billion euros, split 70% in cash, 30% in Cadence shares. The company projects the new unit will tack on $160 million to its 2026 revenue forecast. Non-GAAP accounting: Cadence says earnings per share will take a hit—down about 28 cents in 2026—before swinging positive the following year. CEO Anirudh Devgan described the move as “a major milestone” in Cadence’s drive to expand its reach in system design and analysis. (Cadence)
Hexagon said it got about 2.7 billion euros at closing—part cash, part roughly 3.2 million Cadence shares. The company maintained its earlier estimate: the deal should deliver a gain of about 1.4 billion euros after tax, fees, and currency swings. (Hexagon)
It’s bad timing for Cadence. Shares slid Monday, caught in a wider market downturn, with other software and chip-design names also tumbling; Synopsys, a major competitor in electronic design automation, dropped 4.35% that session. (MarketWatch)
For those tuned into the fine print, it’s all about execution right now: can Cadence integrate structural analysis and multiphysics simulation into its core business without denting margins or getting sidetracked? The acquisition brings in tools for markets like aerospace, automotive, and industrial design—new sales rhythms, new competitors.
The risk, though, is clear enough. If the integration drags out, expenses jump, or clients hit the brakes on purchases, investors end up stuck with dilution—and with the debt and cash burn that follow from a deal done mostly in cash.
Traders are watching for further details on the integration as Cadence continues its busy week of events, including the Cloud EDA networking gathering in Austin, which wraps up Feb. 26. (Cadence)
