SAN FRANCISCOEDA and IP vendor Synopsys Inc. said Thursday (June 10) it signed a definitive agreement to acquire IP provider Virage Logic Inc. for $315 million in cash.
Synopsys (Mountain View, Calif.) said the acquisition of Virage (Fremont, Calif.) would complement its DesignWare interface and analog IP portfolio.
Last month, after issuing its quarterly earnings statement, Synopsys chairman and CEO Aart de Geus emphasized the success and growth of the company's IP business, which he said was approaching a $200 million annual run rate.
During a conference call to discuss the definitive agreement with Virage Thursday, de Geus called the pending deal a "natural fit" to management's strategic vision for Synopsys. He said Virage's product offering is "entirely complementary" to what Synopsys has today.
"Synopsys has built a high-quality IP business over the last decade, and many of our customers now rely on our commercial, off-the-shelf IP to save both cost and time to create their SoCs," de Geus said. "Virage products provide a perfect complement to the Synopsys interface analog IP portfolio by adding embedded memories, standard cells and programmable cores for control and multimedia subsystems."
In physical IP, Virage is seen as a competitor to IP giant ARM Holdings plc and foundries Taiwan Semiconductor Manufacturing Co. Ltd. and United Microeletronics Corp. In memory IP, Virage competes with a range of players.
During the conference call Thursday, de Geus sought to downplay any potential competition with ARM, which partners with Synopsys in several programs. "ARM is one of our most important partners for the last 20 years.," he said. "It's a friend as a company. And it's a great company around which we have built many solutions."
Asked how Virage's 2009 acquisition of microprocessor IP vendor ARC International plc played into this dynamic, de Geus said the ARC products support ARM cores, essentially acting as a controller that can be used for sub tasks that can offload the main processor. "I think it will be interesting to see how we can build better solutions with ARM," de Geus said.
The Synopsys-Virage agreement comes about a month after No. 2 EDA vendor Cadence Design Systems Inc. announced a definitive agreement to buy memory IP vendor Denali Software Inc. for $315 million in cash.
In its most recent fiscal year, which closed in September 2009, Virage reported revenue of $47.4 million, down from $59.3 million a year earlier. In calendar 2009, Virage was ranked as the fifth largest IP vendor, with revenue of about $68.7 million, according to Gartner Inc.
But amid the sluggish economy, Virage has posted eight consecutive quarterly losses, with its last profit coming in the second quarter of fiscal 2008.