Packaging takes front and center stage

Cadence has announced that it has bought Sigrity, a company that specialized in high-speed PCB design and packaging. This is significant to me in two ways. The first is that it is another event showing that the EDA market is heating up again. We have seen a few acquisitions and companies receiving funding recently, and this is a very good sign. The second is the growing importance of packaging and I am imagining that this will heat up with more 3D IC design, in that the package will take on a whole new meaning because what we used to think of being a PCB becomes part of the chip itself. I am sure much of this acquisition will just get integrated with the Cadence Orcad tool suite and will wither as a standalone tool set over time.

The acquisition of Sigrity was completed on July 2, 2012 at a purchase price of approximately $80 million. Primarily due to the impact of purchase accounting rules on deferred revenue and the transition to a ratable license model for Sigrity products, the transaction is expected to be slightly dilutive to fiscal 2012 earnings per share, and then slightly accretive for 2013. Cadence expects that the transition of Sigrity’s business to Cadence’s ratable business model, and the amortization of Sigrity’s deferred revenue will be substantially complete by the end of fiscal 2013. The transaction is not expected to impact Cadence’s previously disclosed profitability goals for fiscal 2013.

Brian Bailey – keeping you covered

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