Synopsys To Acquire Avant! For $769M
Online staff -- EDN, December 3, 2001
Synopsys Inc. today announced plans to acquire Avant! Corp. for about $770 million in stock.
Synopsys, however, is taking certain precautions with its acquisition of the controversial EDA company. Synopsys is taking out a $500 million insurance policy with respect to Avant!’s pending Cadence litigation, for a premium of $335 million. Synopsys said that if the ultimate liability and costs of the litigation are less than about $250 million, it will be entitled to a refund of that difference. Avant! is also liable to pay Synopsys a $45 million termination fee should the transaction be completed for certain, unspecified circumstances.
Earlier this year, Avant! was subject to legal controversy when the company and seven of its current and former executives pleaded no contest and were found guilty of conspiracy, securities fraud and theft of trade secrets from Synopsys’ main rival, Cadence Design Systems Inc.
"The acquisition of Avant! and its key technology offerings brings our customers proven, advanced physical design technology that is a perfect complement for our physical synthesis products," said Aart de Geus, chairman and CEO of Synopsys, in a statement. "It allows us to assemble and deliver for our customers what we firmly believe is the best IC design flow in the industry. As an aside, it fulfills the requests we've been hearing from our customers for years to make this acquisition a reality."
Under the agreement, Synopsys will exchange 0.371 of its shares for each outstanding share of Avant! The acquisition is expected to be completed within three to six months.
Synopsys also today reported its fiscal fourth quarter results, ended Oct. 31, posting a net income before goodwill of $24.5 million or 39 cents per share on revenues of $183.6 million. This compares to a net income of $21 million or 33 cents per share on revenues of $133.2 million in the same quarter a year ago.
Analysts polled by First Call Corp. expected the company to report slightly lower earnings of 36 cents per share. However, the company warned that "in light of the difficult economic environment" first quarter results would fall short of expectations. Synopsys said it expects to report earnings before goodwill between 24 cents and 28 cents per share on revenues of $174 million to $178 million.
