Siemens Expands in the U.S. with Major Software Acquisition

Siemens is making another high-stakes investment in the United States, aiming to strengthen its presence in the pharmaceutical industry. The German tech giant has announced the acquisition of Boston-based software firm Dotmatics for $5.1 billion. This move marks Siemens’ second billion-dollar U.S. acquisition in just a few months, following its $10 billion purchase of industrial software company Altair in the fall.

Dotmatics specializes in software solutions for pharmaceutical research and development. The acquisition is a key part of Siemens’ broader “One Tech Company” growth initiative, designed to solidify its leadership in industrial software and accelerate innovation among its clients. “With the purchase of Dotmatics, we are expanding our software portfolio and helping our customers innovate even faster,” said Siemens CEO Roland Busch.

The deal is one of the three most expensive acquisitions in Siemens’ history and will be funded primarily through the sale of shares in publicly listed affiliates, including Siemens Healthineers and Siemens Energy. CFO Ralf Thomas confirmed that the company intends to use equity stakes in these subsidiaries to finance the deal, following a similar model used in the Altair acquisition. Siemens had already reduced its stake in Healthineers from 75% to 70% and is in the process of selling an additional 6% in Siemens Energy, bringing its holding down to 11%. Siemens is also a major shareholder in U.S.-based energy storage company Fluence Energy.

Dotmatics is currently owned by private equity firm Insight Partners and has a workforce of around 800 employees. The company serves approximately 14,000 customers and expects to generate $310 million in revenue this year, with an EBITDA margin exceeding 40%. The purchase price represents 39 times the company’s expected EBITDA, highlighting the high valuation Siemens is willing to pay for strategic growth.

According to Siemens, the acquisition is set to bring strong revenue synergies, significantly improve profitability, and have a positive impact on cash flow. In the short term, the company anticipates an additional $100 million in revenue, with the potential for that figure to grow to $500 million annually.

A major driver of this acquisition is Siemens’ ambition to expand its reach into the life sciences sector, where its Digital Industries division has had limited presence so far. By integrating Dotmatics’ expertise and client base, Siemens aims to tap into a fast-growing market. The company estimates that the addressable market for its products will expand by $11 billion as a result.

“Artificial intelligence is becoming a transformative force across multiple industries, and its role in life sciences is rapidly increasing,” Busch emphasized. The acquisition of Dotmatics positions Siemens to capitalize on this trend and play a more influential role in pharma innovation.

Dotmatics’ origins trace back to 2005. Insight Partners joined as an investor in 2017, when the company was still operating under the name Insightful Science. In 2021, Insight acquired the UK-based Dotmatics and adopted its name for the combined entity.

The acquisition is expected to close in the fall or winter of 2025/26, subject to regulatory approvals. Once finalized, it will not only enhance Siemens’ software capabilities but also deepen its ties with the global pharmaceutical sector—an industry poised for long-term growth and technological transformation.