The acquisition cost is $507m
Synopsys is to buy out San Jose, Calif-based Magma Design Automation for $7.35 a share in cash, a 28% premium over its closing price on Wednesday of $5.72., or $507m.
The merged companies will compete with Cadence and Mentor Graphics for coveted deals related to tools that can be used to automatically design and lay out chips.
Synopsys CEO Aart de Geus said the dramatic rise in complexity of today’s semiconductor designs for all process nodes requires an equally dramatic increase in designer productivity. He added, This acquisition will enable Synopsys to accelerate the delivery of the technology our customers need to keep the overall cost of design in check."
The merger, which is expected to close in the second quarter of 2012, is subject to approval by Magma shareholders.