EDA and IP vendor Synopsys Inc. said Wednesday (Feb. 19) it entered into a definitive agreement to acquire Coverity Inc., a provider of software quality, testing, and security tools in a deal worth about $375 million.
Synopsys (Mountain View, Calif.) said Coverity products reduce the risk of quality and security defects, which can lead to the catastrophic failures that plague many of today's large software systems.
Under the terms of the deal, Synopsys will pay approximately $375 million, or $350 million net of cash acquired, the company said. The deal is expected to close during Synopsys' fiscal second quarter, which closes in April.
The acquisition of Coverity, which spun out of Stanford University 10 years ago, will open up opportunities to increase penetration into the semiconductor and systems space and also enable Synopsys to enter a new, growing market geared toward enterprise IT and independent software providers, the company said.
"For Synopsys this is a natural technology adjacency and the opening of a significant new, growing market space," said Aart de Geus, chairman and co-CEO of Synopsys, in a statement.
Also Wednesday, Synopsys reported sales of $479 million for its fiscal first quarter, which closed Jan. 31, up about 1 percent from the company's fiscal first quarter of 2013. The company reported a net income in accordance with generally accepted accounting principles of $67.7 million, or 43 cents per share, down from $69.9 million, or 45 cents per share, in the first quarter of fiscal 2013.
"While customers are cautious in their spending, technology demands continue unabated, making great EDA and IP solutions essential for their success," de Geus said.
Synopsys said it expects sales for the fiscal year to total between $2.03 billion and $2.07 billion. The company expects sales for the fiscal second quarter to be between $505 million and $515 million.
Last week, Synopsys announced that it acquired Target Compiler Technologies NV (Leuven, Belgium) a pioneer of application-specific instruction processors, for an undisclosed amount.