( ESNUG 559 Item 5 ) -------------------------------------------- [04/22/16]
Subject: Why CDNS and MENT didn't bother to bid on the Atrenta acquisition
DAC'15 Troublemakers Panel in San Francisco, CA
Cooley: Joe. Joe Sawicki. Why did Mentor... Or actually, Anirudh
and Joe... Why did Cadence and Mentor not bid on Atrenta?
Sawicki: So John you know we've talked many times. I have two rules
for this panel. Number one is don't go to jail and so standard
line as an officer of the company is we don't comment on mergers
and acquisitions.
That said if you look at functional verification, it has a lot
of really, really, really big issues right now. We need to be
able to it bring up a level. We need to be able to boot
software. We need to be able to do power analysis. We need to
move from ICX to being able to do transaction-based. We need
to be able to have a consistent database so we can figure out
what's being verified. I can keep going through the list...
I don't know that a linter is a critical issue.
So did we see that was a critical strategic issue that we're now
looking at and having issues with? No. We're pretty strong in
the formal space which we...
Cooley: What about their BugScope?
Sawicki: Well, like I said, you know, we spent a lot of energy on
putting in place our own debugging stuff. We bought some
things, added some new technology to it. It's just we don't see
it as a critical deficit.
Cooley: Anirudh.
Anirudh: Well, I think like Joe said verification is a very important
area. At Cadence we have what we call the system development
suite and we did make a very important acquisition last year
which was Jasper. And that's the one we focused on and that's
what we are happy with.
Cooley: So... you're saying you have an empty checkbook now?
Anirudh: No, we never have an empty checkbook. What I'm saying is we
have to choose the right technology pieces we want to acquire
and you make some choices as you go along with that.
Cooley: Jim, was this a good purchase? The numbers I'm hearing is
$150 million to $220 million for a revenue of $60 million.
Hogan: How many startups are there out there with more than $50
million in revenue? Right? So that's first question you have
to ask yourself. So I think Atrenta is in a small list, a short
list of companies that have that in EDA.
So if you're at one level trying to get some more revenue in a
product are where you don't have any overlap, it's a good buy.
And I think, at those prices, that's right in line with what
everybody can do accretively. So I think it was a good purchase.
Cooley: You think it will be accretive? That's it actually gonna
add to the Synopsys bottom line?
Hogan: It will be accretive.
Cooley: Why would that be?
Hogan: Well, if you look at how much revenue you have in a year;
let's say it's on the order of 50 million, you pay $200 million.
4 year pay back. Ka-bing, ka-boom.
Cooley: These are linters. These are linter tools.
Hogan: Pardon me?
Cooley: These are linter tools.
Hogan: No, they've got more than that. In fact if you look at the
Atrenta portfolio, the old SpyGlass stuff is about 30 percent
of their portfolio. So they had a pretty balanced portfolio of
different things. So you're just not selling one thing. So
it's actually a pretty good thing to add.
Cooley: Gary?
Hogan: Thank you for letting me finish. [audience laughs]
Gary: I think everybody's missing the point. One of the tools
Atrenta developed in house and they spent a lot of time
developing it -- interesting history of tool set -- is silicon
virtual prototype. And we're not going to really be able to do
high level ES level design without the silicon virtual prototype.
And Atrenta and Real Intent are the only companies that have
really been able to put out a tool that will do the same thing.
Because that's where the chip assembly teams are going to be
assembling their IC.
So Atrenta was a wonderful buy for Synopsys for two reasons.
Number one as Jim said, it gave a big bump on revenue and the
SNPS standard EDA tools aren't growing anymore, so SNPS is
growing by acquisition...
Cooley: By their growth, yeah.
Gary: So you can call it an acquisition buy. But if you look at
Atrenta a lot closer it's a strategic technology buy. And if
Synopsys puts it on the market right, it's going to become one
of their major tools.
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Why CDNS and MENT didn't bother to bid on the Atrenta acquisition
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