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$832 million Ansoft deal adds strength to company

| Sunday, Aug. 17, 2008

Ansys Inc. is raising its profile not only at the Beijing's Olympics, but in Western Pennsylvania.

Two weeks ago, the Cecil-based company completed its $832 million acquisition of Ansoft Corp., another established local software maker. Ansoft, based on the South Side, builds programs that model how electronic systems in a cell phone, for instance, will work and handle stress, long before prototypes are built.

The merger means combining not only the two staffs -- totaling 1,700 worldwide, with the 300 Ansoft workers -- but getting the two companies' products to work together.

CEO Jim Cashman talks of leveraging their combined strengths, and the process could take a year or longer. Some customers use only Ansys or Ansoft products, he said, while others "would love to get the advantage of the two of them working together, like Microsoft Office."

Today's more complex products often involve many types of engineering to create pieces that, in the end, all have to work together.

"Look at the automobile," he said. "Thirty years ago, there were no microprocessors in a car. Now there are 30 or 40 controlling the combustion, even sensing the air pressure in a tire."

Ansys now has virtually every engineering discipline under one roof, said analyst Mark W. Schappel of The Benchmark Co., who repeated his "buy" recommendation for Ansys stock a week after the Ansoft deal closed. Ansys stocks (NASDAQ:ANSS) closed Friday at $46.68, down 53 cents.

In the simplest sense, he said, "The sales force has a lot of tools in the toolbox."

Ansoft's Station Square offices will remain, at least for now, and no job cuts are planned, Cashman said, though Ansys may slow its hiring pace for a while.

Cashman plans to welcome around 1,000 engineers, analysts and corporate managers from around the world to the David L. Lawrence Convention Center, Downtown, from Aug. 26-28 for the 2008 International Ansys Conference.

The event is held every two years in Pittsburgh, and drew 800 attendees in 2006. Of the top 100 industrial companies on the Fortune 500 list, 97 use Ansys products, and the company's sals totaled $385.34 million last year.

"Ansys has strengthened the region's reputation as a software leader" through the Ansoft acquisition and others in recent years, said Jared Roberts, director of member programs for the Pittsburgh Technology Council.

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