Magma to acquire Mojave in a landmark deal

By siliconindia staff writer   |   Wednesday, 25 February 2004, 08:00 Hrs
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SANTA CLARA: Magma Design Automation Inc., a provider of chip design solutions, has announced the signing of a definitive agreement for the acquisition by merger of Mojave, Inc., a developer of advanced technology for integrated circuit manufacturability and verification.

The addition of Mojave's technology to Magma's IC implementation technology will result in a new approach to improving chip manufacturability.

"Design for manufacturing, or DFM, issues will continue to gain importance as designs shrink toward 65-nanometer and smaller geometries," said Rajeev Madhavan, Magma's chairman and chief executive officer. "Mojave's solutions, along with enhancements to Magma's physical design solution for manufacturability, will provide a comprehensive solution for IC implementation and verification, so chips can be manufactured with higher yields. This will enable our customers to reduce design, verification and manufacturing costs as they create smaller, faster and more power-efficient chips."

The combination of these two companies' technologies contrasts with the way DFM has traditionally been approached, as a standalone function conducted after a chip goes through physical design. "We believe that performing DFM analysis and correction concurrently with implementation leads to a better quality design, which in turn leads to improved manufacturability," Madhavan said. "Just as Magma recognized that designing chips at nanometer geometries would require an integrated approach to IC design, Mojave started with a philosophy that improved IC manufacturability stems from making DFM part of the implementation and verification processes. Putting the Mojave technology together with Magma's DFM-aware flow puts us in a unique position to change the game by ensuring that a design is manufacturable, and that its manufacturability can be verified during the design process. We believe the combination of these technologies will enable Magma to address additional markets estimated to exceed $500 million in annual revenue based on current data. It would be an understatement to say that we're thrilled to be gaining this technology - and, more importantly, these technologists."

Among those technologists are Mojave co-founders Vivek Raghavan, John Lee and Murat Alaybeyi, EDA veterans who have developed design software products that went on to become standards within the industry. "We decided that aligning with Magma would be the best way to maximize the impact our technology could have on the IC industry," said Raghavan, Mojave's CEO. "The Magma flow is well established and viewed as industry-leading technology. Combining Mojave's technology with Magma's will provide a superior approach to designing chips faster and ensuring they can be manufactured."

The acquisition will be effected by means of a merger in which Mojave shareholders will receive initial consideration of $25 million. Provided certain technology milestones are achieved, Magma will also make periodic payments of contingent consideration, potentially totaling $115 million, based on product orders over a period ending March 31, 2009. All consideration will be payable half in stock and half in cash. The boards of directors of both companies have approved the transaction. Completion of the acquisition is subject to specified conditions, including the approval of a majority of Mojave shareholders, compliance with securities laws requirements and other customary conditions. The transaction is expected to close during the second calendar quarter of 2004, the first quarter of Magma's 2005 fiscal year.

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