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Altair IPO—Engineering Software Company Soars on Debut

While not ruling out using proceeds for acquisitions, Altair Engineering—parent company of solidThinking, Inc.—says successful IPO will allow it to pay off debt.

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solidThinking”s parent company Altair Engineering has gone public raising $156 million on its opening day this past Wednesday, 1 November 2017. With its IPO share price poised at $13 a share, the company instantly gained millions it intends to use to pay down debt, while shareholders saw 41% rise in their share price on just the first day alone. By the close of the bell, the share price was $18.31.

Importantly, while the IPO proceeds will help pay down debt the company has made small acquisitions in the past and will be open to further acquisitions.

Altair is Big and Important on Many Levels

Altair Engineering is a software technology company many have never heard of before. However, its revenue is similar to Germany’s Nemetschek SE, the parent company AEC industry design and CAD software leaders like Bluebeam, Graphisoft, and Vectorworks all belong to.

Key Takeaway

At over $313 million in revenues last year with over 2,000 employees, Altair Engineering is a significant engineering software company with a positive impact on product development and engineering segments. The company, critically, is taking its “morphogenesis” technology-based product design tool, solidThinking Inspire, into the cloud where it can reach a wider audience on more platforms. 

Like the Nemetschek group of companies, Altair Engineering owns subsidiaries and is also a solid supporter of Apple’s computing platforms in the engineering and design markets. Altair Engineering and its family of products and companies compete with companies like Autodesk, Dassault Systèmes, Siemens and others in the engineering and design markets.

MORE: solidThinking Brings Generative Design to the Cloud

Besides owning solidThinking, Inc., and its namesake family of 3D design software, the company has touted its Mac support on some of its flagship Altair Engineering software such as HyperWorks. Now the company is putting many of its key technologies—some of which descend from NASA—into the cloud, like solidThinking Inspire Unlimited, which is currently in beta.

Altair’s Innovations—Generative Design A Big One

Altair’s early morphosis technology came together in solidThinking Inspire, a software tool Architosh has reviewed and written about extensively. (see: Architosh, “In-Depth: solidThinking Inspire 8.0 with morphogenesis,” 18 Sep 2009.) Morphogenesis is “generative design” technology—technology that mimics’s nature’s evolutionary design processes.

Altair took an early lead in this type of generative design software, which works to find structurally efficient forms for all kinds of industrial parts and products by eliminating unnecessary material. This makes parts lighter; parts that weigh less but still retain their core strength attributes save on fuel and energy related to uses (auto and aerospace industries), transport (shipping costs), and design (smaller parts change characteristics in designed products).

01 – The result of Morphogenesis technology applied to a stadium design.

Morphogenesis technology was even explored in architecture where new radical forms were utilized. (image 01 above). 

Altair’s CEO James Scapa says the company’s principal focus of operations is simulation software, an area found in engineering and design software solutions. Altair’s revenues were $158.5 million for the first half of the year, up 4% from the year-ago period. Scapa has told MarketWatch that the software space they compete in—the engineering simulation market—is a roughly $6 billion market growing annually at 8% yearly and will be an $8 billion market by 2021.

The company opted for a dual listing with Class-A shareholders having one vote per share and Class-B shareholders having ten votes per share. This was implemented to give Scapa in particular controlling interest in the company.

Architosh Insight

  • Altair delivers solutions in aerospace, AEC, automotive and transportation,  marine and shipbuilding, energy, electronics, and consumer products among other industries. Industrial design and product engineering are core areas of expertise due to its digital tools based on two major brands: HyperWorks and solidThinking. 
  • One of the largest global architecture firms, SOM, has utilized their software for tall building design, which used the company’s OptiStrut technology solutions. Arup has also used CFD (computation fluid dynamics) software tools from Altair in their AEC engineering work for architect clients. 
  • Many of Altair’s generative design and simulation technologies have direct competitors in software solutions from Autodesk and Ansys for example. 

 

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