MSC.Software Agrees to Antitrust Case Settlement

A Santa Ana maker of simulation software said Wednesday that it has tentatively settled an unusual federal antitrust case that sought to undo two acquisitions completed more than two years ago.

MSC.Software Corp., which also reported a second-quarter net loss but strong sales growth, did not reveal details about the deal with the Federal Trade Commission.

“The settlement is without precedent,” said Chairman Frank Perna Jr. “There was no trial, no fine, no admission of wrongdoing, no restatements, no material adverse effect on the company at all.”

The FTC said only that administrative court proceedings were withdrawn last week because the two sides had reached a proposed consent agreement. The settlement now goes to the FTC board for approval, which is probable early next month, Perna said.

In an effort to step up scrutiny of small mergers and acquisitions, the FTC alleged last fall that MSC.Software’s two acquisitions gave the company a monopoly on specialized engineering software used in the automotive and aerospace industries. MSC.Software fiercely disputed the claim, which could have forced it to shed businesses that accounted for as much as 39% of its $178 million in sales in 2000.

MSC.Software said it lost $6.1 million, or 21 cents a share, in its second quarter, contrasted with net income of $2.9 million, or 18 cents, in the same period a year earlier. Results include restructuring and other one-time charges and write-offs totaling $10.2 million. Sales rose 95% to $95.1 million, aided by results from acquisitions.