Cadence bids to buy Mentor Graphics
Anne-Francoise Pele
EE Times Europe (06/17/2008 8:42 H EDT)
PARIS — Cadence Design Systems Inc. has announced it has submitted a
proposal to the board of directors of Mentor Graphics Corp. to acquire Mentor
Graphics for $16.00 per share in cash. The transaction is valued at $1.6
billion.
Cadence (San Jose, Calif.) said its all-cash proposal represents a 30-percent
premium over the closing price of Mentor Graphics' common stock on June 16,
2008, the last trading day prior to public disclosure of Cadence's proposal,
a 59-percent premium over the closing price of Mentor Graphics' common stock
on May 2, 2008, when Cadence presented the terms of the proposal to Mentor
Graphics, and a 46-percent premium over Mentor Graphics' average closing
price for the past 30 trading days.
In a letter sent today (June 17) to the board of directors of Mentor
Graphics, in care of Walden C. Rhines, chairman and CEO of Mentor Graphics,
Michael J. Fister, president and CEO of Cadence, recalled that he and Rhines
first spoke about combining Cadence and Mentor Graphics on April 16, 2008.
He, however, expressed disappointments that Rhines has "far been unwilling to
meaningfully participate in such discussions."
In a press and analysts conference today, Fister declared: "Mentor Graphics
informed us at the end of May that it desired to remain independent and did
not wish to pursue further discussions regarding our proposal. We decided to
publicly disclose our proposal given Mentor Graphics' refusal to negotiate
with us."
In his letter to Rhines, Fister explained why such acquisition makes sense.
He wrote: "We believe that a combined Cadence-Mentor will provide customers a
broader and more fully integrated product and technology portfolio in a
timeframe that better enables them to address urgent and complex challenges
associated with their next-generation product development."
Fister added: "Combining Cadence and Mentor Graphics and aligning the
creative talents of our respective hard-working and innovative employees will
deliver more comprehensive cutting-edge solutions and an entirely new level
of customer experience and satisfaction. Together we can accelerate the rate
and efficiency of customers' innovation by making it possible for them to
develop products that better meet end user needs."
Cadence's proposal is subject to the negotiation of a mutually agreeable
merger agreement, the completion of certain limited and confirmatory due
diligence, and the satisfaction of other customary conditions, including
receipt of regulatory approvals.
Headquartered in Wilsonville, Oregon, Mentor Graphics counts about 4,200
employees and announced revenues of about $850 million Revenue in last
reported 12 months.
Cadence reported revenues of $1.61 billion for the year 2007.
Recently, Cadence has been involved with many acquisitions. For instance, in
March 2008, Cadence acquired Chip Estimate Corp., a developer of IC planning
and IP reuse management tools. In August 2007, Cadence bought acquired Clear
Shape Technologies Inc., a developer of Design for Manufacturability (DFM)
technology, and one month before, it acquired Invarium Inc., a
photolithography specialist.
"We have done 36 different kinds of acquisitions over a ten-year period, and
the challenges of any of those are all the same," commented Fister in the
press and analysts' conference. "We are very thoughtful about our customers'
solution requirements and demonstrate efficiency in productivity for them. In
this case, we will be able to take what we have been able to demonstrate so
far to another level, and that will be very intriguing. There are all the
right ingredients. It is compelling and it is at a point of time when the
customers environment is very difficult as they deal with cost challenges.
The time is right to come and do it."
http://www.eetimes.com/news/design/showArticle.jhtml?articleID=208700062
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