SAN JOSE, Calif. Cadence Design Systems Inc. will acquire OrCAD Inc. (Beaverton, Ore.) in a cash tender offer of $13 per share in a deal valued at $121 million. The announcement today (June 15) of the deal comes just a week after Cadence completed its merger with Quickturn Design Systems Inc.
The combined Cadence and OrCAD will employ over 4,400 workers and will address the growing mainstream segment of ready-to-use pc-board tools, as well as the emerging EDA enterprise market, which Cadence expects to be worth at least $700 million in 1999.
The deal gives the combined company the EDA industry's largest customer base for pc-board design software and services, the companies said. Cadence reported revenues of $1.2 billion in 1998, while OrCAD reported revenues of $47 million last year.
Ray Bingham, president and chief executive officer at Cadence (San Jose, Calif.), said the acquisition "solidifies Cadence's position in the PCB market and provides immediate growth opportunities for our existing software and services businesses." Cadence will leverage OrCAD's telesales channel to bring Cadence's Windows NT-based pc-board design and logic simulation products and services to OrCAD's 160,000 users, he said.
OrCAD's recent decision to sell electronic components over the Internet will provide significant benefits to Cadence, the companies said.
Cadence said it plans to combine OrCAD's front-end design tools with Cadence's Affirma family of Verilog and VHDL logic simulation products and its Intrica suite of pc-board tools.
OrCAD will be united with Cadence's pc-board team into a single pc-board business group. Mike Bosworth, chief executive officer of OrCAD, will lead the new pc-board group and report directly to Shane Robison, president of Cadence's Design Productivity Group, which is responsible for Cadence's EDA products and services. Dave DeMaria will run marketing for the new pc-board business group, and will report to Bosworth.
The acquisition will be accounted for under the purchase method of accounting. Following completion of the tender offer, any shares not tendered will be acquired, at the same price per share, through a merger. The tender offer will commence within five business days, and tendered shares will be purchased at the end of 20 business days.
The acquisition, which is subject to certain conditions, has been approved by the boards of both companies.