Hexagon Refocuses Strategy With Sale Of CAE Software Portfolio To Cadence

Hexagon has announced the €2.7 billion sale of its design and engineering tools within its manufacturing intelligence division to Cadence Design Systems (Cadence), a move that sharpens its strategic focus. The unit, which had been anchored by MSC Software since its acquisition in 2017, provided Hexagon with a solid foothold in computer-aided engineering (CAE) and simulation. Over its ownership, Hexagon steadily grew the business and migrated it toward subscription-based licensing. Meanwhile, recent market developments have brought electronic design automation (EDA) vendors such as Cadence to the forefront as the dominant force in multiphysics and system-level analysis.

Cadence’s value proposition and business strategy are centred on simulation and electronic design solutions, and the acquisition of Hexagon’s design and engineering tools further strengthens this. Cadence has broadened its scope from electronic to mechanical and system-level domains, offering customers a more unified simulation environment. At the same time, by divesting its MSC Software-centred CAE portfolio, Hexagon is placing greater emphasis on its core strengths in precision and measurement instrumentation.

Earlier this year, Hexagon announced the creation of Octave, a separate organization that will focus on digital solutions spanning the full asset and plant life cycle, from design and build through to operate and protect, by combining four of Hexagon’s businesses – Asset Lifecycle Intelligence; Safety, Infrastructure & Geospatial; ETQ; and Bricsys – under a single brand. Hexagon, in turn, will increasingly function as a precision instrumentation provider and, potentially, as a buyer of Octave’s software solutions where these integrate with its hardware and sensor businesses. By establishing Octave as a standalone entity, Hexagon has separated its digital design portfolio and positioned Octave to lead investment in plant lifecycle intelligence and digital reality capabilities. The Verdantix market overview on industrial engineering, design and construction software finds that most providers remain concentrated on point solutions, whereas Octave’s portfolio of lifecycle tools places it among the smaller group of firms able to deliver broader coverage across the industrial facility life cycle.

This repositioning reflects a broader consolidation trend across industrial software, characterized by focused acquisitions and divestitures over the past three years. Siemens completed its acquisition of Altair Engineering in March 2025 for $10 billion, integrating its leading simulation, data science and AI capabilities into the Siemens Xcelerator platform to create a comprehensive AI-powered industrial software portfolio. Synopsys completed its acquisition of Ansys in July 2025, in a landmark $35 billion merger that unified simulation and EDA in one of the most significant consolidations the market has seen. On the divestment side, Hexagon previously carved out non-core assets within its Safety, Infrastructure & Geospatial division in July 2025, enabling it to focus resources on higher growth public safety software offerings.

For industrial software buyers, the Hexagon-Cadence transaction illustrates how portfolios are being reshaped to sharpen long-term priorities. The spin-off of Octave will position it as the dedicated vehicle for plant lifecycle intelligence and digital reality capabilities, combining Hexagon’s software assets into a business that can deliver end-to-end solutions across design, build, operate and protect. At the same time, the sale allows Hexagon to concentrate on its core strength in precision instrumentation and measurement technologies, while Cadence expands its reach in multiphysics and system-level simulation by moving deeper into mechanical domains. For the broader market, the transaction underlines how scale, focus and strategic clarity are becoming critical for vendors aiming to deliver sustainable value to industrial customers.