Electronic design automation (EDA) software company Synopsys Inc. (SNPS: 23.69 +0.33 +1.41%) recently completed the acquisition of Virage Logic Corp. (VIRL: 0.00 N/A N/A) for $12 per share. The total consideration of the deal came in at approximately $315.0 million.

Virage Logic’s business is expected to integrate easily with Synopsys, as the former provides semiconductor intellectual property (IP) for the design of complex integrated circuits. In a way, this acquisition is expected to supplement Synopsys’ Designware platform, as well as its Intellectual Property product category.

The company has adopted acquisitions as a growth strategy. Earlier, it added technology, engineering resources and other such assets of Synfora, Inc. to its portfolio. Synfora provides C/C++ design technology, for complex system-on-chips (SoCs) and Field-Programmable Gate Arrays (FPGAs).

This acquisition was intended to strengthen Synopsys’ position in the FPGA-based prototyping solutions business. By using Synfora’s technology, designers will be able to manufacture better integrated circuits. In short, the acquisition will enhance the company’s technical efficiency, as well as its product and service portfolio.

Apart from acquisitions, Synopsys’ time-based license revenue model also offers good momentum. This contributes almost 85% to total revenue. Under this system, customers rent the software, rather than paying a one-time upfront license fee. Hence, this is a much more predictable model, providing better visibility through a steady and recurring revenue stream.

Of course, the model does not provide a competitive advantage, as the revenue recognition model is more or less similar to its peers. Therefore, moving forward, we believe Synopsys will have to find new avenues to outperform in the space.

We believe that currently the company is in a consolidation phase as it reported year-over-year revenue declines, while earnings per share were a bit above our expectations in the third quarter. This apart, the company is also witnessing bookings growth, and exploring untapped markets. These efforts are expected to reap results in fiscal 2011.

Although 2011 is expected to be a growth year, the 2010 guidance does not reflect any meaningful growth. Synopsys is gaining traction from new products and new EDA partnerships, but we believe these factors will take some time to produce favorable results.

Additionally, the semiconductor industry is currently witnessing an inventory glut, so 2010 demand will be lower than originally estimated.

Currently, we have a long-term Neutral recommendation and a short-term Zacks Rank #3 (Hold) on the stock.

Source:http://www.dailymarkets.com/stock/2010/09/03/synopsys-wraps-up-virage-deal/

Synopsys, a provider of software and IP for semiconductor design, verification and manufacturing, announced immediate availability of the DesignWare MIPI M-PHY IP for next-generation high-speed interfaces based on the newly ratified MIPI Alliance M-PHY specification.

With this latest addition to the DesignWare MIPI IP portfolio, Synopsys is the first provider to offer a comprehensive solution of a controller and PHY IP for both the MIPI DigRFSM v3 (2.5G/3.0G) and v4 (4G) standards. Incorporating both standards in a mobile device brings the benefit of the faster 4G standards while preserving broad coverage by using 2.5G/3.0G as a fallback mode. The configurable MIPI DigRF V4 Master Controller and M-PHY hard macro are compliant to the MIPI Alliance specifications. Utilizing a single-vendor solution enables designers to lower the risk and cost of integrating these MIPI interfaces into baseband and application processor integrated circuits (ICs), speeding time-to-market of advanced semiconductor solutions for LTE and Mobile WiMAX.

The DesignWare MIPI M-PHY implements all required physical layer functionality defined in the MIPI DigRF v4 specification. The DesignWare MIPI M-PHY keeps the energy expenditure below 15pJ/bit for typical LTE applications. The integrated analog Phase Lock Loop (PLL) and biasing block are designed to help guarantee the integrity of the high-speed clocks and signals required to meet the strict timing requirements of the protocol. DesignWare MIPI M-PHY supports the optional dithering functionality defined in the MIPI DigRF v4 specification to further lower Electromagnetic Interference (EMI).

“As an active contributor to the MIPI working groups, Synopsys continues to make solid contributions that support the MIPI Alliance portfolio of specifications,” said Joel Huloux, Chairman of the MIPI Alliance. “Synopsys is speeding the adoption of the new M-PHY interface into mobile devices and helping designers benefit from the latest functionality offered by the MIPI-based technology.

Source:http://www.siliconindia.com/shownews/Synopsys_announces_immediate_availability_of_DesignWare_IP-nid-71006.html

Software company, Synopsys, is purchasing semiconductor intellectual property company, Virage Logic, for $315 million, The Wall Street Journal reports. Synopsys, which provides software used to design semiconductors, has offered $12 for each Virage share.
The deal, which is expected to close in the fourth quarter of 2010, will help customers incorporate standard functions into their chips and focus on product development. Virage’s president and CEO, Alex Shubat, will join Synopsys, after the deal.

Source:http://www.emii.com/Article.aspx?ArticleID=2594057