Synopsys to buy Magma for $507 million
Synopsys (Mountain View, CA) said it plans to pay $7.35 for each share of Magma. Synopsys said it plans to fund the deal with a combination of cash and debt.
The deal, which is expected to close in the second quarter of 2012, would be the biggest acquisition in EDA in years. It would also bring together competitors who have traditionally been fierce rivals.
In the 2000s, Synopsys and Magma fought a long running legal battle over allegations that a co-founder of Magma conceived of technology that unpinned Magma’s products while working at Synopsys. The suit, which culminated with a trial in 2006, was settled in 2007.
Aart de Geus, Synopsys’ chairman and CEO, said the companies’ past legal wrangling is water under the bridge. He noted that EDA and the semiconductor industry in general area areas where change is constant and rapid. "Stuff happens," de Geus said. "We look forward. It’s all about one thing: what can we do to make the customer successful."
"It’s a great deal for Synopsys," said Gary Smith, chief analyst at Gary Smith EDA. Smith said the deal makes sense for Synopsys because while Synopsys’ analog custom IC EDA effort has not really taken off, Magma’s has. "That’s the big grab [for Synopys]," Smith said.
But de Geus said Synopsys was not motivated by Magma’s strength in any one particular product area. Instead, de Geus said Synopsys sees the Magma acquisition as an opportunity to expand its R&D talent pool.
The deal remains subject to closing conditions, including the approval of both companies’ shareholders. De Geus indicated that no decisions about product support have been made, but suggested Synopsys’ primary focus would be on customers.
John Chilton, senior vice president of marketing and strategic development, said Synopsys would not discontinue any Magma products at the time of the deal closing. Instead, Chilton said, Synopsys would sit with customers and the combined product roadmap of both companies to determine what products were needed and how to move forward.
Also, Wednesday November 30th, Synopsys reported sales and profit in line with analysts’ expectations for the quarter ended Oct. 31. Sales in the quarter rose to $390.5 million, up 1 percent compared to the previous quarter and up 4 percent compared with the year-ago quarter, Synopsys said. The company reported a net income in accordance with generally accepted accounting principles (GAAP) of $39.9 million, or 27 cents per share, down 23 percent from the previous quarter and up 57 percent compared with the year-ago quarter.
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