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The threatened takeover by Cadence has not stopped Mentor from continuing to strengthen its position on the PCB market by acquiring Flomerics, a British company that, among other things, develops and sells a thermal analysis product used in PCB and package design. Of course Flomerics does more than that, and is also very active in the fluids dynamics and HVAC markets. Wally Rhines was helpful enough to let me know, while we were discussing the EDAC MSS report, that Flomerics would become a part of the Systems Design Division (Mentor aphorism for PCB design) so Henry Potts was the natural person to call about the details. What faith awaits these two product lines is not clear, since, like good patriots, all of the Mentor people in Longmont seemed to have vanished in the afternoon of July 3rd. So Henry Potts phone just kept ringing
Carbon Design Systems is the other company making news with a British deal. And this one is big. ARM and Carbon have reached an agreement whereby Carbon will take over the development, marketing, and support of SoC Designer. This means that ARM has come to the realization that its main business is IP development and marketing, not EDA tools.
I have for many years, questioned both Altera and Xilinx about their strategies of investing money developing EDA products that specifically support their silicon products, and then charge all customers of said silicon additional money to pay for the tools, whether or not they use them. The answers I received by both companies every time I ask, is that they cannot count on a third party providing timely support for their silicon. At first such explanation might sound wise: but when you stop and think about it, it is a major denial of the strength of a capitalistic system. If the silicon is good and people want to use it, they will want design tools that support it, and they will be willing to pay for them. Therefore, there will be EDA companies that will be interested in developing, marketing, and selling said tools. Of course both Synplicity (now Synopsys) and Mentor have made been active and profitable in the market segment, offering "real" tools instead of "low end" tools offered by both Altera and Xilinx. So ARM has shown the way to true wisdom, and I would not be surprised if Coware or Mentor do not improve their support for ARM products as well. In the mean time, Carbon's profile as a serious player in the ESL market, has risen considerably.
Meanwhile on the West Coast
In the mean time, Mentor's "disagreement", to use a polite term, with Cadence has had the predictable outcome of forcing Mentor to spend money it had not budgeted. It hired both investment bankers Goldman Sachs & Co. and Merrill Lynch & Co. Inc. as financial advisers, and has also engaged Latham & Watkins LLP, a huge international law firm, as legal adviser. So Mike Fister has already succeeded in lowering profit margins of his acquisition target. Next thing you know he will claim that now Mentor is worth even less than $16/share
It was interesting to read John Cooley's report on what various segments of the EDA population thought of the proposed deal. If it outcome depended on a vote by that constituency, Mike Fister better get a good strategist, a spinner like Carl Rowe comes to mind. because 81% of respondents were against the deal.
As a wise, experienced, and somewhat on the inside, friend pointed out to me it is not about the good of the industry, it is not about the best interests of the customers, it is about profits in the financial markets. So, in spite of the fact that I hate to admit it, and in spite of the fact that Wall Street investors seem to have mixed feelings about it (Mentor stock is still below $16.00, I re-iterate my prediction. The acquisition will go through, the price as i wrote on June 17th, will be $18/share (see Cadence's Arrogance), and Mike Fister will retire a richer man.
Who will replace him at the helm you ask: Greg Hinckley, of course. It is the price of the deal. He is the Mentor executive whose style is closer to Cadence's than any one else in Wilsonville. Wally will run the much expanded Cadence Research Center, and give even more speeches than ever. Within five years, Mentor will have eaten Cadence from the inside and, instead of Cadentor, we will have Mentorence as the major competitor to Synopsys.
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