Cadence Design Systems Acquires Denali Software for $315 Million

Cadence Design Systems, Inc. (Nasdaq: CDNS), a leader in global electronic design innovation, and Denali Software, Inc., a leading provider of electronic design automation (EDA) software and intellectual property (IP), announced that the companies have entered into a definitive merger agreement under which Cadence will acquire Denali for $315 million in cash. Denali is expected to have approximately $45 million in cash at closing. In alignment with its EDA360 strategy, this 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. “We are excited to welcome Denali’s talented employees and look forward to delivering the value inherent in this combination.”

“Bringing our two companies together provides a path for future growth, as well as expanded opportunities for our customers and employees,” said Sanjay Srivastava, president and chief executive officer of Denali. “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.”

EDA360 centers on three components: (1) System Realization – the development of a complete hardware/software platform with all of the capabilities needed to begin applications development and deployment; (2) SoC Realization – the development of a single system on chip (SoC), including silicon IP and “bare-metal” software; and (3) Silicon Realization – everything required to get a design into silicon, including the creation and integration of large digital, analog, and mixed-signal IP blocks.

The merger will accelerate the delivery of the solutions outlined in this vision:

  • Denali’s memory models provide system component modeling and verification capabilities required in System Realization
  • Denali’s Design IP products enhance the Cadence Open Integration Platform required in SoC Realization
  • Denali’s ease-of-use and well-established support of third-party simulators by its Verification IP (VIP), coupled with the focus on metric-driven and compliance management of Cadence’s VIP, make this combination highly complementary and necessary for SoC Realization, and enable Cadence to expand its third-party simulation support

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.

For more information, see the Question and Answer document on the Cadence website at www.cadence.com/cadence/investor_relations/Documents/DenaliQA.pdf

Audio Webcast Scheduled
Lip-Bu Tan, Cadence’s president and chief executive officer, and Kevin S. Palatnik, Cadence’s senior vice president and chief financial officer, will host an audio webcast to discuss the merger on May 13, 2010, at 5:30 a.m. (Pacific) / 8:30 a.m. (Eastern). Attendees are asked to register at the Web site at least 10 minutes prior to the scheduled webcast. An archive of the webcast will be available starting May 13, 2010 at 8:30 a.m. (Pacific) and ending May 20, 2010 at 8:30 a.m. (Pacific). Webcast access is available at www.cadence.com/company/investor_relations

About Cadence
Cadence enables global electronic design innovation and plays an essential role in the creation of today’s integrated circuits and electronics. Customers use Cadence software and hardware, methodologies, and services to design, verify, and implement advanced semiconductors, consumer electronics, networking and telecommunications equipment, and computer systems. The company is headquartered in San Jose, California, with sales offices, design centers, and research facilities around the world to serve the global electronics industry.