By Kelly Cloonan

Siemens has agreed to acquire Dotmatics for $5.1 billion, a combination the companies said would use artificial intelligence to speed up development cycles and help make breakthroughs in the life-sciences space.

Dotmatics provides software connecting science, data and decision making to support research and development in the life-sciences industry.

The deal would combine Dotmatics's applications with Siemens's manufacturing, industrial-simulation and AI capabilities, connecting development from the research-and-development stage all the way through manufacturing. Siemens said that Dotmatics will increase its total addressable market within the industrial software industry by $11 billion.

The deal aligns with the Munich company's aims to accelerate innovation across industries.

"Artificial intelligence has emerged as a transformative force across various industries, and its application in life sciences is becoming increasingly important," Siemens Chief Executive Roland Busch said.

The deal will be financed primarily through the sale of shares in listed companies, including Siemens Healthineers, Siemens said.

Dotmatics, which is currently backed by investment firm Insight Partners, is expected to generate more than $300 million in revenue this fiscal year. Siemens said the company is highly profitable and has an adjusted Ebitda--or earnings before interest, taxes, depreciation and amortization--margin of more than 40%

Siemens expects medium-term revenue synergies of around $100 million a year, which would pick up to over $500 million a year in the long term. The deal will be immediately accretive to Siemens's growth, Ebitda margin and free cash flow before considering any synergies.

Siemens expects the deal to close in the first half of fiscal 2026.

Write to Kelly Cloonan at kelly.cloonan@wsj.com

(END) Dow Jones Newswires

April 02, 2025 15:45 ET (19:45 GMT)

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