The existing Software Integrity Group management team is expected to lead the newly independent, privately held company after the transaction closes. The name of the new standalone entity will be announced at a later date. Synopsys is committed to a seamless transition for the Software Integrity Group team, customers, and partners.
"Clearlake and Francisco Partners have a strong track record of success investing in growing software platforms and are ideal partners to continue growing this business as an independent, world-class software security provider," said Sassine Ghazi, president and CEO of Synopsys. "For Synopsys, this move sharpens our focus on the unprecedented, high-growth opportunity we have in our core business – where the engineering of silicon and systems is converging as technology R&D teams look to capitalize on this AI-driven era of pervasive intelligence."
"We are excited to partner with Synopsys to complete the carve-out of its Software Integrity Group, a leading provider of application security testing solutions," said Dipanjan "DJ" Deb, Co-Founder and CEO of Francisco Partners. "Francisco Partners has a long history of working with leading technology companies to carve-out divisions and business units that can benefit from greater focus and flexibility as standalone entities, and where our Francisco Partners Consulting operating team can bring resources and expertise to help accelerate growth."
"As security becomes more embedded in DevOps workflows, we believe the demand and importance of application security testing providers will continue to rise," said Behdad Eghbali, Co-Founder and Managing Partner of Clearlake. "We are ready to leverage Clearlake's O.P.S.® framework to foster operational enhancements, build upon the Software Integrity Group's robust product offering, and fuel new growth as a standalone enterprise."
"Advancements in generative artificial intelligence technology are likely to disrupt the software development lifecycle over time, increasing the velocity of code generation and introducing new forms of software risk. The Software Integrity Group's strong portfolio of application security testing products provides enterprise customers with tools that integrate security into developer's workflows. This ensures developers can create high quality, secure and compliant code that minimizes cybersecurity risks, including risks arising from generative artificial intelligence, and directly addressing a growing need in the market," said Prashant Mehrotra, Partner, and Sean Courtney, Principal, at Clearlake.
"Enterprise engineering and security teams face an increasingly dynamic and challenging threat environment today, and ensuring the quality and security of their software applications has become a top strategic priority. Synopsys' Software Integrity Group is a leader in application security testing solutions, providing a comprehensive platform for software engineers and security teams to secure and protect their mission-critical software applications," said Brian Decker and Evan Daar, Partners at Francisco Partners. "We look forward to working with the leadership team at the Software Integrity Group to accelerate growth and innovation as a standalone company."
Synopsys' Software Integrity Group provides integrated software solutions that transform the way development teams build and deliver software, accelerating innovation while addressing business risk. Its comprehensive, industry-leading portfolio of software security products interoperates with third-party and open-source tools, allowing organizations to leverage existing investments to build the security program that is best for them.
The transaction, which was unanimously approved by Synopsys' Board of Directors, is currently expected to close in the second half of 2024, subject to customary closing conditions including the receipt of required regulatory approvals.
Advisors
J.P. Morgan served as financial advisor and Cleary Gottlieb Steen & Hamilton served as legal advisor to Synopsys. Evercore, Deutsche Bank, and Barclays acted as financial advisors to Clearlake and Francisco Partners. Sidley Austin acted as lead legal advisor to Clearlake and Francisco Partners. Simpson Thacher & Bartlett also advised Francisco Partners.
About Synopsys
Catalyzing the era of pervasive intelligence, Synopsys, Inc. (Nasdaq: SNPS) delivers trusted and comprehensive silicon to systems design solutions, from electronic design automation to silicon IP and system verification and validation. We partner closely with semiconductor and systems customers across a wide range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow. Learn more at www.synopsys.com.
About Clearlake
Founded in 2006, Clearlake is an investment firm operating integrated businesses across private equity, credit, and other related strategies. With a sector-focused approach, the firm seeks to partner with experienced management teams by providing patient, long term capital to dynamic businesses that can benefit from Clearlake's operational improvement approach, O.P.S.® The firm's core target sectors are technology, industrials, and consumer. Clearlake currently has over $75 billion of assets under management, and its senior investment principals have led or co-led over 400 investments. The firm is headquartered in Santa Monica, CA with affiliates in Dallas, TX, London, UK, Dublin, Ireland, and Singapore. Learn more at www.clearlake.com.
About Francisco Partners
Francisco Partners is a leading global investment firm that specializes in partnering with technology and technology-enabled businesses. Since its launch nearly 25 years ago, Francisco Partners has invested in more than 400 technology companies, making it one of the most active and longstanding investors in the technology industry. With approximately $45 billion in capital raised to date, the firm invests in opportunities where its deep sectoral knowledge and operational expertise can help companies realize their full potential. Learn more at www.franciscopartners.com.
Synopsys Contacts:
Trey Campbell
Investor Relations
Email Contact
Cara Walker
Media Relations
Email Contact
PE Contacts:
CLEARLAKE
Jennifer Hurson Lambert
Email Contact
FRANCISCO PARTNERS
Whit Clay / Jake Cohen
Sloane & Company
Email Contact /
Email Contact
Cautionary Statement Regarding Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the federal securities laws with respect to the proposed transaction, including, but not limited to, statements regarding the proposed transaction, the anticipated timing of the closing thereof and the post-closing transition of the Software Integrity Group, and its customers and partners; the market outlook, products and business of Synopsys and the new standalone company following the transaction, and the benefits of and costs from the transaction to Synopsys and the new standalone company; the total consideration (including the portion of the purchase price payable upon Francisco Partners and Clearlake Capital achieving a specified rate of return in connection with one or more liquidity transactions) and the potential financing for the transaction; Synopsys' and the new standalone company's expectations and objectives; strategies related to Synopsys' and the new standalone company's products, technology and services; trends, opportunities, strategies and technological trends, such as artificial intelligence; and customer demand and market expansion of each of Synopsys and the new standalone company. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions or the negatives of these words or other comparable terminology to convey uncertainty of future events or outcomes. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties.
