M&A: Mentor triumphs, Tanner customers not so much?

Last October, I had a lively conversation with Tanner EDA President Greg Lebsack. He was enthused about the company’s tools, technology innovations, and future. For that reason, it seemed surprising to hear that Tanner was acquired by Mentor Graphics. A close reading of the March 3, 2015, press announcement suggests Mentor intends to continue to support Tanner’s products despite a possible overlap between some of the tools of the two companies, fully acknowledged in the press release.

Mentor Graphics today announced it has acquired the business assets of Tanner EDA, a leading tool provider for the design, layout and verification of analog/mixed-signal and MEMS integrated circuits. With this acquisition, more designers will now have access to Tanner’s AMS products based on the strength and reach of the Mentor Graphics global sales organization. All Tanner EDA products as well as existing AMS products from Mentor will continue to be available and supported.

A quote from Greg Lebsack was included: “Tanner EDA has built an outstanding reputation as the price performance leader for the design, layout and verification of AMS ICs, MEMS and IoT devices. We are excited to join Mentor Graphics where we can leverage their extensive technology leadership and global footprint. We view this transaction as very positive for Tanner EDA’s customers, employees and the industry as a whole.”

I have no doubt that President Lebsack backed the sentiments attributed to him, but it’s hard to understand how melding the tools from Tanner into the Mentor armamentum is good for Tanner’s customers, or the industry as a whole.

Instead of having access to the services and tools of a small, committed organization, Tanner customers will now have to deal with one of the mega-sized sales organizations within EDA. No matter how caring the Mentor sales organization may be, or their FAEs, it’s a mystery how dealing with them would be easier for customers than dealing with Tanner’s smaller, more personal enterprise.

To drive that point home, listen to what Greg Lebsack said in our conversation last October:

“From the founding of Tanner [27 years ago], we have been a company built by engineers for engineers and taking great pride in our products. Being a small company, without the marketing budget of the big companies, it’s true we are a well-kept secret in EDA, but that is changing with more and more people taking notice of us.

“The comments we get back from our customers [consistently indicate] that they are highly satisfied with our products, that our emphasis is in the right area. Now as we expand our reach into mixed signal, beyond our [traditional] focus on analog, the increased marketing helps. We offer our customers a choice, and the response from our customer base continues to makes us proud.”

Okay, so clearly Tanner was moving towards an expanded marketing budget last October, but did they have to get full-on acquired to meet that goal?

That’s the question that was on my mind when, interestingly, I received this week [no doubt, along with many thousands of recipients] the following email on March 31st.

Dear Peggy,

The Tanner EDA technology & products recently acquired by Mentor Graphics offers a comprehensive yet affordable solution for Analog/Mixed Signal design. It offers a complete integrated mixed-signal solution from design to tape-out supported on both Windows and Linux platforms.

Included in the email was a link to a 30+ minute video that promises to show the viewer “how to design analog/mixed-signal ICs from concept to completion; how to leverage the OpenAccess layout database, making it easy to share designs with third-party tools; how to verify your layout with 2D and 3D parasitic extraction; how to design MEMS using a powerful solution; and how to integrate powerful point tools, such as Calibre and ModelSim.”

All of this is well and good, but when I actually opened the video and watched the tutorial, ModelSim from Mentor referenced in the opening slide was not actually mentioned in the voice-over narration for the PowerPoint presentation, only Tanner tools.

That seems pretty telling to me. Mentor may be celebrating the triumph of having acquired one of the crown jewels in the ecosystem of second-tier EDA companies, and those with a substantial equity stake in Tanner, but it remains to be seen if the customers of that particular crown jewel will be as enthused. Only time will tell.

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Addendum …

Per the March 3rd Press Release: “Harvest Management Partners, LLC advised Tanner Research, Inc. regarding the sale of the assets of Tanner EDA. Terms of the deal were not disclosed.”

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Tags: Greg Lebsack, Harvest Management Partners, Mentor Graphics, Tanner EDA

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