Chip designer Synopsys Inc ( SNPS ) has entered into a definitive agreement with Clearlake Capital Group, L.P. and Francisco Partners, two global private equity firms, to sell its Software Integrity Group business.

The transaction is valued at up to $2.1 billion, including up to $475 million in cash payable upon Francisco Partners and Clearlake achieving a specified rate of return.

After the completion of the transaction, Software Integrity Group business will emerge as a newly independent application security testing software provider, led by the existing management team.

The business will provide integrated software solutions that transform how development teams build and deliver software, boosting innovation while addressing business risk.

The name of the new standalone entity will be announced at a later date.

“For Synopsys, this move sharpens our focus on the unprecedented, high-growth opportunity we have in our core business – where the engineering of silicon and systems is converging as technology R&D teams look to capitalize on this AI-driven era of pervasive intelligence,” said President and CEO Sassine Ghazi.

The transaction, unanimously approved by Synopsys’ Board of Directors, is currently expected to close in the second half of 2024.

Synopsys ( SNPS ) held $1.27 billion in cash and equivalents as of January-end.

In January, Synopsys ( SNPS ) agreed to acquire rival design software firm Ansys Inc ( ANSS )  for $35 billion.

Price Action: SNPS shares are trading higher by 1.05% at $542.57 at the last check Monday.