SAN FRANCISCO—In a surprise deal that brings together two of the leading electronic system level (ESL) design software products, Calypto Design Systems Inc. said Friday (Aug. 26) it acquired Catapult C Synthesis from Mentor Graphics Corp. The terms of the transaction were not disclosed.
Calypto (Santa Clara, Calif.) said the combination of Catapult C with Calypto's SLEC System-HLS verification tool will create a better integrated ESL hardware realization flow and enhance the company's partnership with Mentor.
"This is a great deal for Calypto," said Gary Smith, chief analyst at Gary Smith EDA, in a statement issued by Calypto. "They are clearly one of the companies on the rise in ESL, and this gives them the chance to offer a compelling power-optimized C to RTL flow if they can integrate all the pieces."
ESL methodologies, which enable chip designers to work at a higher level of abstraction, has for years been considered the next evolutionary rung in chip design and EDA. Migration to ESL methodologies has been gaining traction, but at a slower pace than many observers had expected.
According to Smith, ESL adoption grew by 13 percent last year, and his firm is forecasting a compound annual growth rate for ESL adoption of nearly 28 percent over the next five years.
In an interview, with EE Times, Doug Aitelli, Calypto's CEO, said the company determined that to increase ESL adoption it needed to get all of the different pieces of an integrated ESL design flow "under one roof." Combining C synthesis with Calypto's sequential verification and power optimization products means Calypto has not integrated the majority of the pieces required for an integrated ESL flow, Aitelli said.
Aitelli emphasized that Calypto remains an independent company, supporting many different tools and industry-wide interoperability. "This doesn't change our outward stance on how we work with other parts of the industry," Aitelli said.
Despite the spinoff of Catapult C, Brian Derrick, vice president of marketing at Mentor, said the company remains deeply committed to ESL. Derrick said that Calypto's ownership of Catapult C would spur broader adoption of high-level synthesis, one part of the ESL flow. Broader adoption will, in turn, increase Mentor's market opportunity for ESL virtual prototyping environments led by the company's Vista product, Derrick said.
"This is just one component of our overall ESL strategy," Derrick said.
Brett Cline, vice president of sales and marketing for Forte Design Systems Inc., a leading supplier of high-level synthesis software that competes with Catapult C, described the Catapult C deal as "yet another example of how the big EDA companies like Mentor cannot afford to continue to give away products for very low prices without taking a hit to their bottom line."
Cline added that he interpreted the deal as a signal that Mentor saw the Catapult business losing momentum to the point where the cost savings of moving the employees off of the books to Calypto outweighed the revenue that the product produced.
Interesting. Normally it's the big fish swallowing up the small ones thru M&A. This time it's a small fish eating up a small piece of a big fish.
I have seldomly seen anything like this in American business landscape. Spinoff is common in Asia but American companies always want to be bigger & bigger.
What's to become of support for non-Catapult high-level synthesis tools? I don't see any motivation on Calypso's part to continue supporting Forte Design System's Cynthesizer or Cadence's C-to-S tools.
I understand from talking to Calypto's CEO that the company will continue to support all of the tools it supports now. I understand your concern about the motivation for doing so, but the CEO went out of his way to emphasize this point (probably to head off any concerns such as yours).
"Aitelli emphasized that Calypto remains an independent company, supporting many different tools and industry-wide interoperability. "This doesn't change our outward stance on how we work with other parts of the industry," Aitelli said."
In this deal, Mentor's equity from the Catapult C group and existing minority investment in Calypto yields two seats on the board of directors. So it appears that MGC has a controlling stake in an otherwise independent Calypto.
On a practical level, this frees the Catapult C team to interact with other ESL partners at will. At Mentor, they were part of the same organization that housed Vista and Precision.
By the way, your colleague Max has a good opinion piece on the EE Times blogs with an interesting comment from Brian Bailey ...
Hmm... some big moves are in the making in the EDA business - Mentor needed to attach itself to a key piece of ESL technology while more or less disconnecting itself from its own faltering CatC, just to be able to be a player in these coming moves (that may or may not happen). Good move by Mentor, and if it gives Calypto some deeper pockets, good for them too. God knows Calypto has burned through a mountain of cash.
Join our online Radio Show on Friday 11th July starting at 2:00pm Eastern, when EETimes editor of all things fun and interesting, Max Maxfield, and embedded systems expert, Jack Ganssle, will debate as to just what is, and is not, and embedded system.