Synopsys / Magma Acquisition Debate!

[LinkedIn]

This sounds awful, for a simple reason:

Competition is good.

The more competitors, the more 'creative destruction' occurs, which benefits the semi industry with a continual stream of better, cheaper products.
I would much rather see Cadence and Synopsys BROKEN UP rather than see two whales surrounded by a smattering of guppies.
Posted by peter gasperini

[Daniel Nenni]

This sounds awful, for a simple reason:

Competition is good.

The more competitors, the more 'creative destruction' occurs, which benefits the semi industry with a continual stream of better, cheaper products.
I would much rather see Cadence and Synopsys BROKEN UP rather than see two whales surrounded by a smattering of guppies.
Posted by peter gasperini

That concept certainly has merit. The most important weapon an EDA company can have is customer IQ. Unfortunately, as companies grow customer IQ shrinks and that is why so much innovation comes from emerging companies.

[Daniel Nenni]

Well, the wait is over...As you may have seen, Synopsys closed the acquisition of Magma this morning. Synopsys also posted results for the first quarter fiscal 2012.


Highlights of both announcements are provided below. The full releases can also be accessed here: Synopsys Q1FY12 Results; Synopsys Q1FY12 Results; Synopsys Completes Acquisition of Magma.
Q1 FY2012 highlights include:
Synopsys had excellent Q1 results and is raising its outlook for fiscal 2012, independent of any impact from the Magma acquisition.
· Q1 FY12:
o Revenue for the first quarter of fiscal 2012 was $425.5 million, compared to $364.6 million for the first quarter of fiscal 2011 – an increase of 16.7 percent and well above Synopsys’ target range.
o Fiscal Q1 included an extra week, affecting both revenue and expenses. Even without the impact of the extra week of approximately $26 million, revenue growth was 10 percent.
o GAAP net income for the first quarter of fiscal 2012 was $56.69 million, or $0.39 per share, compared to $48.2 million, or $0.31 per share, for the first quarter of fiscal 2011.
o On a non-GAAP basis, net income for the first quarter of fiscal 2012 was $82.3 million, or $0.56 per share, compared to non-GAAP net income of $68.3 million, or $0.44 per share, for the first quarter of fiscal 2011.

· Second quarter fiscal 2012 targets:
o Revenue of $412 million - $420 million.
o Non-GAAP EPS in the range of $0.54 - $0.56.
(Previously announced range was $0.51 - $0.53).
o GAAP EPS in the range of $0.37 - $0.43.

· Full fiscal year 2012 targets – raised:
o Revenue of $1.665 - $1.675 billion
o Non-GAAP EPS in the range of $1.97 - $2.03.
(Previously announced range was $1.93 - $1.99)
o GAAP EPS in the range of $1.33 - $1.48.
Synopsys Completes Acquisition of Magma Design Automation

Synopsys has completed its acquisition of Magma Design Automation, enabling the combined company to more rapidly meet the needs of leading-edge semiconductor designers looking for ever-more sophisticated design tools.

· The value of the transaction is approximately $523 million net of cash acquired, or $7.35 per Magma share in cash.
· Synopsys will fund the acquisition using a combination of cash and debt.
· Synopsys anticipates it to be modestly accretive to non-GAAP earnings per share in its fiscal 2012.

Earnings Results Webcast
Synopsys will report results for the first quarter fiscal 2012 today after market close. Synopsys will hold a conference call for analysts and investors to review the results and to discuss the acquisition today at 2 p.m. PT (5 p.m. ET). A live webcast of the call will be available at Synopsys’ corporate website at www.synopsys.com. A recording of the call will be available by calling +1‑800‑475‑6701 (+1-320-365-3844 for international callers), access code 236854, beginning at 4 p.m. PT today. A webcast replay will also be available on the website from approximately 5:30 p.m. PT today through the time Synopsys announces its results for the second quarter fiscal 2012 in May 2012. Synopsys will post copies of the prepared remarks of Aart de Geus, chairman and chief executive officer, and Brian Beattie, chief financial officer, on its website following the call.

[Rich]

Moot point:
Synopsys Completes Acquisition Of Magma Design Automation - Quick Facts