M&A: It’s Jasper to Cadence, at last …

In the moments prior to Cadence’s quarterly earnings call this afternoon, the company released news of the acquisition of Jasper Design Automation for $170 million, less $24 million in cash, and a small tremor rippled out across the EDA Nation.

Paraphrasing Cadence CEO Lip-Bu Tan in the early minutes of his 5pm ET earnings call: We are very pleased to announce a definitive agreement to acquire Jasper Design Automation. This will help us to further meet our customers’ needs for more advanced verification solutions, particularly today as verification now represents 70% of the cost of SoC development. Together, Cadence and Jasper can move forward, offering the strong formal verification solutions leading customers need. In addition, Cadence is also very pleased to be bringing on board the strong team at Jasper, a team with excellent real-world experience.

All good stuff, yes? So why any tremors in our beloved little EDA Nation?

A) Because, between Oasys (Mentor, 4Q’13), Forte (Cadence, 1Q’14), BDA (Mentor, 1Q’14), Coverity (Synopsys, 1Q’14), and Jasper (2Q’14), that’s five high-profile acquisitions in just the last four months. The big EDA companies are clearly becoming a great Black Hole, with massive gravitational pull that seems to disallow any small companies, even ones that are successful, to remain independent [and free?] once the Big Guys get them in their cross-hairs.

B) Because, as a well-known EDA Thought Leader said to me recently: “No matter how much the guys in the big companies want to do it, the only way they get innovative products is to buy them.” Which begs the question: So what happens when there are no more small companies left to buy?

C) Finally, who will be left on the EDAC Board if anybody not named Wally, Aart or Lip-Bu is no longer able to serve?

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Tags: Aart de Geus, BDA, Cadence, Coverity, EDAC, formal verification, Forte, Innovation, Jasper Design Automation, Kathryn Kranen, Lip-bu Tan, M&A in EDA, Mentor Graphics, Oasys, Synopsys, Wally Rhines

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