Germany group Siemens said on Wednesday it is buying Dotmatics, a US software company, for $5.1 billion to leverage its use of artificial intelligence to make drug discoveries.
Siemens said the acquisition was "complementary" to its expansion into Life Sciences and would lift its game in a market needing more medication innovation as populations age.
"These trends underscore the need for digital transformation, with software spending expected to double over the next five years," Siemens said in a statement.
The German group said that it expected Docmatics to be immediately profitable, and to bring in $100 million a year in revenue over the mid-term, rising to $500 million in the long-term.
It said the transaction would be completed in the first half of next year.
Siemens recently bought another US software firm also using AI, Altair Engineering, for $10 billion.
Docmatics, founded in 2005 and with a workforce of 800 people, presents itself as a leader in R&D software, and has a platform using AI to accelerate drug research.
Siemens, Germany's second-biggest company by market capitalisation, has been seeing increased revenues from its software division as its digital products for factories face a slump.
This story was originally featured on Fortune.com
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