( ESNUG 492 Item 3 ) -------------------------------------------- [05/26/11]
Subject: Rival EDA vendors think Apache is going to be acquired by/at DAC
> Since I'm an engineer who only knows technical and NOT finance, I asked a
> friend who knew financial stuff to look at the Apache IPO S-1 filing:
>
> "First, they're profitable. Second, they have $26 M in cash, their
> total operating expense is $29 M with an operating income of $6 M.
> This means they have a year's worth of expenses socked away in cash.
> They have no long term debt obligations, so all that cash is real.
> This makes Apache's IPO a growth IPO and not a survival IPO. Some
> companies burn through cash and IPO to survive; not the case here."
>
> He also liked that APAD revenue grew 3X over 5 years.
>
> - from http://www.deepchip.com/gadfly/gad031811.html
From: [ An Anon EDA Vendor ]
Hi, John,
Your Apache story missed a key conclusion. Andrew isn't trying to take APAD
public. This S-1 is his way of showing the entire EDA world how good the
Apache books are and that *someone* should buy his company.
Anon pls.
- [ An Anon EDA Vendor ]
---- ---- ---- ---- ---- ---- ----
From: [ An Anon EDA Vendor ]
Hi, John,
Have you seen those numbers in the APAD S-1? Revenue is $44 million.
127 R&D engineers costing $11.5 million
109 Sales & Marketing
21 General & Admin
If a Big Four co acquires APAD, the redundant Sales & Marketing and G&A are
let go leaving $44 million revenue that costs $11.5 million. That's a tidy
$32.5 million annuity that an APAD aquisition represents.
I'd be surprised if Apache wasn't acquired by DAC.
- [ An Anon EDA Vendor ]
---- ---- ---- ---- ---- ---- ----
From: [ An Anon EDA Vendor ]
Hi, John,
Apache is a 1 product company (Redhawk). That's not enough for an IPO but
it would be a superb addition to Synopsys, Mentor, or Magma. It would give
Cadence a monopoly in IR-drop, so the FTC probably would nix that deal.
- [ An Anon EDA Vendor ]
---- ---- ---- ---- ---- ---- ----
From: [ An Anon EDA Vendor ]
Hi, John,
Andrew Yang is a start-up CEO; not a public company CEO. He likes creating
new value in EDA and selling it off to the highest bidder.
- [ An Anon EDA Vendor ]
---- ---- ---- ---- ---- ---- ----
From: Keith Mueller <keith=user domain=tuscanyda got calm>
Hi John,
Andrew Yang is undoubtedly the most visionary and driven leader that I have
seen in my career. Over the 15 years I've known him, he's consistently been
able to identify the next critical need that can be served by EDA, as the
semiconductor industry moves to ever smaller geometries. He thinks of
technical issues that are far enough out there that nobody else is
addressing them yet, but not too far out that would make it difficult for
the new start-up to survive until the market realized he was right.
On top of his deep technical competence, he's also extremely business savvy.
It's very rare to find both of those qualities in a CEO. This combination
allowed him to identify key technology needs for Apache's growth and acquire
at least 4 or 5 other start-ups along the way. He runs the company with
tight fiscal reins.
I couldn't think of anyone better qualified to carry the banner for EDA
in an IPO.
- Keith Mueller
Tuscany Design Automation, Inc.
---- ---- ---- ---- ---- ---- ----
From: [ An Anon EDA Vendor ]
Nice story, John.
Someone's going to buy Apache before it ever goes public.
They're only haggling over the price now.
It'll be announced at DAC.
- [ An Anon EDA Vendor ]
---- ---- ---- ---- ---- ---- ----
From: [ An Anon EDA Vendor ]
Wow, John,
When whoever buys Apache actually does buy Apache, Andrew should tip you
$1 million for drawing wide attention to Apache's value.
- [ An Anon EDA Vendor ]
---- ---- ---- ---- ---- ---- ----
> Another Apache weakness is also its strength.
>
> "Apache has been Andrew Yang's baby since Day 1 of the company. He
> built the company up from zero himself. Andrew works tirelessly and
> is involved in ALL aspects of the company, from deep R&D questions to
> customer sales to lawyer issues to accounting concerns to the exact
> DAC Apache booth layout to minor marketing decisions. He does it
> ALL. Without Andrew, Apache would fall apart. Aart was the same
> way early on in Synopsys until he eventually learned to let go and
> delegate. It took some time for him to get there, though."
>
> - An anon Apache rival
>
> "I think Apache's well run," says Gary Smith of Gary Smith EDA. "Andrew
> might be the only one running it, but it's a well run EDA company.
>
> - from http://www.deepchip.com/gadfly/gad031811.html
From: [ An Anon EDA Vendor ]
Hi, John,
I think it's unfair to call out Andrew on how he micromanages Apache.
If he didn't control his company that way, Apache would have been crushed
under the mammoth weight of Cadence's omnipresent sales force. The fact
that Apache could stay 6 steps ahead of Cadence's internal politics and
petty kingdoms is why Apache made $44 million in revenue that rightfully
should have been on Cadence's balance sheet.
Name any great symphony that was written by committee.
- [ An Anon EDA Vendor ]
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