Synopsys Inc.
(
SNPS
) recently completed the acquisition of privately-held software
maker ExpertIO Inc. Financial terms of the deal were kept
confidential.
ExpertIO is an independent provider of Verification Internet
Protocol (
VIP
) for storage devices. It specializes in software that is required
for testing and debugging electronics in storage and networking
devices. ExpertIO had been a technology partner to Synopsys for a
long time.
Synopsys makes software that is used to test and develop chips.
It has its own set of VIP protocols. This latest acquisition will
go hand-in-hand with its capabilities, enhancing the existing suite
of VIP protocols. Moreover, Synopsys' intellectual property will
also get enhanced by the addition of ExpertIO's expert team.
The combined effort will bring in advanced VIP solutions that
will enhance the SoC (System on Chip) designs. The ExpertIO
acquisition is in line with Synopsys' strategy of broadening its
VIP portfolio to address the growing verification challenges that
designers face while developing complex systems on chips (SoCs) to
serve the demand for 'smart' electronics.
Strategic acquisitions have always been Synopsys' ploy to
strengthen its product portfolio. In 2011, the company made a
number of acquisitions. In October, Synopsys completed the
acquisition of privately-held electronic design automation (EDA)
company, Extreme DA.
In September, Synopsys completed the acquisition of a leading
independent provider of VIP, nSys Design Systems Private Limited.
With the acquisition of Virage Logic Corp. in 2010, Synopsys added
embedded memories, including SRAMs (static random access memory)
and non-volatile memory, logic libraries, embedded test and repair
IP and configurable processor cores, to its IP portfolio.
One thing to note here is that Synopsys has shown no initiative
to diversify to other lines of business, although its acquisitions
have consistently built upon its core competencies, while enabling
it to expand capabilities in adjacent areas. Additionally, taking
over the same line of businesses will enrich its portfolio, while
also reducing integration time and cost.
Synopsys delivered solid results in the fourth quarter, with
good operating performance and cost control. The company also
announced the acquisition of Magma Design Automation Inc., a chip
design software manufacturer, which is expected to boost
profitability. The first quarter 2011 guidance is encouraging.
We are encouraged with Synopsys' product innovation strategy,
the popularity of its time-based license model and its strong cash
position. Although Synopsys is gaining traction from new products
and acquisitions, we believe these will take some time to produce
favorable results. Besides, the company is also facing competition
from
Cadence Design Systems
(
CDNS
).
Synopsys currently has a Zacks #2 Rank (short-term Buy
rating).
CADENCE DESIGN (
CDNS
): Free Stock Analysis Report
SYNOPSYS INC (
SNPS
): Free Stock Analysis Report
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