(Reuters) -Synopsys will sell its software integrity (SIG) unit to a private equity consortium led by Clearlake Capital and Francisco Partners in a deal valued at $2.1 billion, the chip designer said on Monday .
Reuters reported last week that the private equity firms had prevailed over rivals and that their consortium was in advanced talks to acquire the SIG unit, which provides application security testing to software developers.
The agreement includes up to $475 million in cash that will be paid once the acquiring companies achieve a certain rate of return related to one or more liquidity transactions.
Liquidity transactions refer to deals in which a company’s share holders, including employees, can sell their shares.
Synopsys announced plans in late 2023 to divest its SIG unit. In January, the company agreed to acquire rival design software company Ansys for $35 billion, its biggest deal ever.
The deal with SIG is expected to close in the second half of 2024 and will create a new autonomous entity that will provide application security testing software.
The company said it would release the name of the new business at a later date.
(Reporting by Harshita Mary Varghese; Editing by Sonia Cheema and Ravi Prakash Kumar)