By Mary Lisbeth D’Amico

Siemens said Thursday it has agreed to acquire UGS, a supplier of industrial software, for $3.5 billion, from the private equity investors Bain Capital, Silver Lake Partners, and Warburg Pincus.

Still subject to regulatory approval, the acquisition of Plano, Texas-based UGS will amount to a significant expansion of Siemens’ presence in the market for industrial manufacturing software.

UGS, which specializes in software to help manufacturers manage their product life cycles, has approximately $1.2 billion in annual sales, 7,300 employees, and 46,000 customers, in 62 countries.

Combined with Siemens’ Automation and Drives division, the unit will employ some 7,000 software designers alone, according to Siemens.

“With the acquisition of UGS, we combine its competence in the sector of digital factories with our leading know-how in industrial automation,” Siemens CEO Klaus Kleinfeld said in a statement.

UGS’ portfolio includes products for collaborative product management, computer-aided design, manufacturing and engineering, and digital manufacturing simulation. Private equity investors bought UGS from Electronic Data Systems in 2000, in what was then one of the largest technology buyouts.

Auto Supply Unit IPO

In separate news today, Siemens also said it plans to take its automotive supply unit public, a profitable unit with $10 billion in annual sales. Both moves are part of a wider restructuring taking place at Siemens, in which Mr. Kleinfeld has vowed to drive up profits at all divisions of the company.

Siemens also announced its first-quarter results Wednesday, with net profits falling by €788 million ($1.02 billion) compared to the same period a year ago.

The company said that was largely due to a fine imposed by the European Commission for price-fixing in its gas-insulated switch-gear division. However, revenues rose 6 percent to €19.07 billion ($24.80 billion) from €17.98 billion ($23.38 billion).

Siemens has also been caught in a battery of negative headlines recently amid a corruption scandal involving top management at the company (see Nokia Delays JV with Siemens).