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MikeSantarini
Is there going to be an analysis follow up piece to this place holder article? ...
CamilleK
This is an excellent move by Cadence and is definitely in line with the ...
Cadence to buy Denali for $315 million
Peter Clarke
5/13/2010 11:00 AM EDT
LONDON -- EDA software vendor Cadence Design Systems Inc. (San Jose, Calif.) has entered into a definitive merger agreement to buy memory model company Denali Software Inc. (Sunnyvale, Calif.) for $315 million in cash. Denali is expected to have approximately $45 million in cash at closing.
The transaction expands Cadence's solution portfolio to deliver efficient and cost-effective system component modeling and IP integration. The transaction was unanimously approved by the Cadence and Denali boards of directors.
"Denali's strengths in memory models, design IP and verification IP accelerate the execution of Cadence's recently announced EDA360 vision, creating new opportunities for the company," said Lip-Bu Tan, president and chief executive officer of Cadence, in a statement.
"Cadence is a leader in global electronic design and is the right match for Denali and its employees. I am personally excited to be a part of the Cadence team and to help realize the EDA360 vision." said Sanjay Srivastava, president and chief executive officer of Denali, in the same statement
Cadence's EDA360 initiative centers on three components: system realization, SoC realization and silicon realization.
Denali's memory models help provide component modeling and verification at the system level; design IP contributes to the vision at the SoC level and support of third-party simulators supports the creation of silicon, Cadence said.
Cadence intends to finance the transaction with available cash. The transaction is expected to be accretive to Cadence's fiscal year 2011 earnings per share.
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MikeSantarini
5/13/2010 11:42 AM EDT
There goes the best party at DAC...
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harrytheASICguy
5/13/2010 5:04 PM EDT
This makes a lot of sense from a product/strategic POV and also from an operational POV. Strategically, Cadence was behind in the IP space and this gets them up near the front. It also provides the IP needed for system design (memory models) which will help in its EDA360 push. Operationally, the Denali sales force is mostly not needed since it overlaps Cadence's sales force, so it can save expenses. I'd also expect perhaps a new sales channel for this IP to emerge, one that is lower cost and uses online technology.
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CamilleK
5/13/2010 5:51 PM EDT
This is an excellent move by Cadence and is definitely in line with the announced EDA360 strategy and along the lines of expanding the verification scope to help the IP integrators and not just the IP creators. In fact the chapter headings of the EDA360 paper speak to what Denali will mean to Cadence:
- Ch 1: EDA Industry Focus Shifts to Integration and Profitability
- Ch 2: Application-Driven System Realization
- Ch 3: Software-Aware SoC Realization
- Ch 4: EDA360 Enables Silicon Realization
So definitely a play from their blueprint.
With the Wind River announcement/partnership linking virtual prototyping to RTL, then this one, I expect even more aggressive moves from Cadence in the verification space. I would encourage Cadence to build on verification enablement while not losing focus on preserving the custom/analog position (not that they need my advice :-). Finally I would say more consolidation will be occuring in many EDA/IP/foundry spaces with companies looking to either bulk up or cash out.
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MikeSantarini
5/14/2010 1:50 PM EDT
Is there going to be an analysis follow up piece to this place holder article? In particular, I'd like to know if Denali's employees were given a cut. If Denali's execs will stay on, and, if so, for how long? Will Cadence still throw Denali's memcon? Also, what exactly is Cadence getting with this acquisition? Denali's most noted for selling memory models for software simulators (not even the simulators themselves)--that's verification IP. The company in more recent years has started to offer implementation IP too. Will the models still be sold for and work in third party simulators other than Cadence? What implementation IP does Denali offer? Lots of folks are saying this acquisition now makes Cadence as formidable an IP player as Synopsys but if you look at the portfolios (even after a Denali acquisition) it doesn't seem even close to me. I think it is a vast overstatement to say Denali acquisition equals "EDA360 mission accomplished"--it's just a small step toward it.
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