EDA vendors merge in million dollar deals

EDA leader Cadence Design Systems has signed a definitive merger agreement to acquire Simplex Solutions, while Mentor Graphics is to acquire all of the outstanding shares of Innoveda.

The electronic design automation industry continued down its path of consolidation today as industry EDA leader Cadence Design Systems announced that it had signed a definitive merger agreement to acquire Simplex Solutions, the Sunnyvale, CA-based company that provides software and services for the design and verification of integrated circuits.

Two days ago, the other big name in EDA, Mentor Graphics, announced that it had signed a definitive merger agreement to acquire all of the outstanding shares of Innoveda for $3.95 per share in cash, for a total purchase price of approximately $160 million.

For its part, Cadence is to acquire Simplex in a tax-free, stock-for-stock merger with an equity value of approximately $300 million, or $18 per share of Simplex common stock.

Upon closing of the merger, Simplex stockholders will receive between 0.924 and 0.756 shares of Cadence common stock in exchange for each outstanding share of Simplex stock held by them, depending on the price of Cadence common stock prior to the closing.

The merger of Cadence and Simplex is subject to certain conditions, including compliance with applicable regulatory requirements and the approval by Simplex’s stockholders.

As a result of the merger, Simplex will become a wholly owned subsidiary of Cadence. The acquisition is expected to be completed in the third quarter of 2002.