) recently completed the acquisition of EVE. The acquired company
is a provider of emulation platforms for SoC verification.
The emulsion segment provides a range of technologies that are
specifically used for verifying some of the complex systems on
chips (SoCs) services. The acquisition enables the integration of
Synopsys' technologies such as simulation, debug and verification
IP (VIP) with EVE's technology. Eventually, Synopsys's customers
can avail of wider verification solutions. This is a new line of
business for the company, which it wants to explore.
The company did not disclose the terms of the acquisition and
does not expect it to contribute much to 2012 or 2013 results.
Synopsys has for long been trying to tap this emulation technology
and this is a nice opportunity for the company. EVE offers
innovative emulation technology which is used by companies in
semiconductor and electronic systems across the globe.
Strategic acquisitions have always been on Synopsys' agenda to
strengthen its product portfolio and promote growth. In August
2012, the company completed the acquisition of a privately-held
electronic design automation (EDA) company, Ciranova.
The company largely works on delivering productivity
improvements in custom integrated circuit ("IC") design. Again in
January 2012, the company completed the acquisition of a
privately-held software maker ExpertIO Inc.
Acquisitions might be a prudent way of expanding the company
inorganically. However, Synopsys needs to make bigger acquisitions
to compensate for the modest growth rate in the industry. Also, the
revenue contribution by the acquired companies remains uncertain as
the industry is yet to pick up and generate additional business
Although Synopsys is gaining traction from new products and
acquisitions, we believe these might take a quarter to produce
favorable results. Besides, the company is also facing competition
Cadence Design Systems
Synopsys currently has a Zacks #2 Rank (short-term Buy
SYNOPSYS INC (SNPS): Free Stock Analysis Report
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