Supply Chain Management

Cadence Keeps Consolidating with Jasper Purchase

22 April 2014

EDA software vendor Cadence Design Systems Inc. is set to boost its position in design verification with the acquisition of Jasper Design Automation for a purchase price of $170 million in cash.

Cadence (San Jose, Calif.) also finds itself in an acquisition competition against rival EDA software vendor Synopys Inc. (Mountain View, Calif.). Both companies have now tipped two acquisitions each in 2014.

Jasper provides multiple verification products built on its JasperGold platform. The acquisition would create the industry's broadest system verification offering, Cadence said.

The deal is part of a steady deal-flow that sees the leading EDA companies acquiring successful second tier companies. In February Synopsys moved to acquire Coverity Inc., a provider of software quality, testing, and security tools in a deal worth about $375 million. In the same month Synopsys announced that it had bought Target Compiler Technologies NV (Leuven, Belgium) a pioneer of tools to create application-specific instruction processors (ASIPs) for an undisclosed amount of money. And in the same month Cadence moved to buy high-level synthesis company Forte Design Systems Inc. (San Jose, Calif.) for an undisclosed sum of money.

With verification representing over 70 percent of the cost of developing a system-on-chip, it has become the top system and SoC development challenge and is the critical factor for time-to-market, Cadence said, adding that Jasper’s technology strengths are highly complementary to Cadence’s System Development Suite.

"The verification technologies, when combined, will benefit customers through a comprehensive metric-driven verification approach that unites formal and dynamic techniques, realizing the strength of each and leveraging the integration between them," said Kathryn Kranen, president and CEO of Jasper, in a statement issued by Cadence. The transaction is expected to close in the second quarter of fiscal 2014, subject to customary closing conditions including regulatory approvals.

First quarter profit down

The planned acquisition was revealed as Cadence reported first quarter 2014 revenue of $379 million, compared to revenue of $354 million reported for the same period in 2013. The net income in 1Q14 was $33 million down from $79 million in the same period in 2013.

For the second quarter of 2014, the company said it expects total revenue in the range of $370 million to $380 million and for 2014 the company tipped sales of between $1.55 billion to $1.59 billion, without the added in contribution from Jasper.

Back in February Synopsys said it expects sales for the fiscal year to total between $2.03 billion and $2.07 billion while sales for its fiscal second quarter would be between $505 million and $515 million.

Related links and articles:

News articles:

Synopsys to Buy Software Quality and Security Firm Coverity

The Math Backs Cadence's Forte Acquisition

Synopsys Buys Application Processor Pioneer

Synopsys Tool Claims Big Throughput Boost

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