Siemens nears deal to buy Mentor Graphics at a 21% premium

[Staf_Verhaegen]

If we expect things to be business as usual, where Mentor EDA product families continue to be sold as tools (a merchant software company), I'm very bearish.

If we expect things to transform, with Mentor intellectual capital helping Siemens create products including software (an Industry 4.0 company), and we're not too worried about Mentor continuing to be an EDA supplier as they exist today, I'm more bullish.

I expect something in the middle, where some pieces are kept and some are spun out.

I also expect it to be something in the middle. For example, I think Calibre was already a problem child as hardly being able to generate enough revenue to invest in keeping up with the newest nodes. Building on comment of D.A.N., I do see it being sold to one of the big foundries or even ASML as a possible scenario.

 

[Daniel Nenni]

I also expect it to be something in the middle. For example, I think Calibre was already a problem child as hardly being able to generate enough revenue to invest in keeping up with the newest nodes. Building on comment of D.A.N., I do see it being sold to one of the big foundries or even ASML as a possible scenario.

Cadence could also benefit from the Calibre monopoly...... That would be a serious blow to Synopsys. But yes TSMC would be a good place for it as well. I really do love this disruptive stuff.

 

[Tom Simon]

Mentor has always been a strong brand in Europe, and with the systems market. So in that sense it is understandable. One wonders how future product development will be influenced. Though this shows that there is value for EDA companies, I am not sure it will help anyone else go IPO or help to kick off a new wave of EDA startups.

 

[Bernard Murphy]

Mentor has always been a strong brand in Europe, and with the systems market. So in that sense it is understandable. One wonders how future product development will be influenced. Though this shows that there is value for EDA companies, I am not sure it will help anyone else go IPO or help to kick off a new wave of EDA startups.

Agreed - for a small company to move the needle for a big EDA company is hard enough. Doing so for a large company like Siemens would be impossible, limiting interesting acquisitions to those sporting leads in hot trends (deep learning, etc).

 

[Eric Esteve]

I strongly doubt that Siemens/Mentor would decide to go back to the IP business... IP is not in German industry culture (unlike UK, USA or France).
Is the deal good or bad? It could represent a move toward system design (H/W and S/W), the new company offering an integrated toolset, more efficient to support system development, like Industrial IoT for example.
Is it a threat for SNPS and CDNS?... at least not for High-end SoC design!

 

[simguru]

[I'm a bit late chipping in on this...]

Most of the big EDA companies are pretty dysfunctional in how their tools work: they sell licenses not results. That doesn't work that well for people trying to shift Silicon.

The purchase of one of the bigger three was inevitable - someone put up numbers at DAC a few years ago with market caps for IC manufacture and EDA and the IC business was worth 20x the EDA business, so if you want to sell more ICs you need EDA on your side rather than in your way, and you can buy your way out of the problem.

The interesting piece here is that if Mentor goes, then nobody can buy Cadence or Synopsys because that would leave a monopoly player.

Had I been in the position to buy any EDA company, Mentor would be the one I'd have bought since Calibre is the key tool in the chain, most of the other stuff is so-so and replaceable.

Ansys probably didn't have the money to buy Mentor and could have done a merger, but that wouldn't have let Wally retire in as much comfort ;-)

 

[simguru]

Hey, if they bought a CAD company, maybe they'll buy a (digital) fab next.

GlobalFoundries - Wikipedia

(I would)

 

[Daniel Nenni]

Interesting followup:

Mentor Graphics' sale to Siemens: Filing discloses negotiations, 'golden parachutes' | OregonLive.com

From what I heard there were (5) actual bidders: Dassault, ANSYS, Siemens, China PE Firm, and Cadence.

 

[simguru]

Interesting followup:

Mentor Graphics' sale to Siemens: Filing discloses negotiations, 'golden parachutes' | OregonLive.com

From what I heard there were (5) actual bidders: Dassault, ANSYS, Siemens, China PE Firm, and Cadence.

Cadence may live to regret not bidding higher. I considered the state of EDA as a bit of a Mexican-standoff where nobody could afford to change how things worked. Siemens doesn't need Mentor to make money the way Synopsys/Cadence do (by selling licenses), so they can kick out the management and get the engineers to fix the tools so they work well for (Siemens) customers (I'd take a job doing that), and Mentor has enough stuff to make life painful for Cadence and Synopsys in a price war.

 

[schroeder]

Siemens has a lot of faces, people seem to forget that they are one of the reference companies in the industrial automation with their PLCs (google on Siemens S7; YMMV on results you see). So they more down into system level software, electronic system design and even chip design than most people think. It's true that the Calibre verification suite is not directly fitting in the Siemens prortfolio but the HLS much more than people realise. I do see machines with custom chips and/or FPGA acceleration perfectly falling under the Industry 4.0 hype term.

First interview with Mentor's Wally Rhines and Siemens PLM Software head Chuck Grindstaff seems to agree with Staf_Verhaegen vision.

As Grindstaff acknowledged, “IC EDA is a market expansion for Siemens.” In reality, Siemens PLM and Mentor already share customers such as car OEMs and tier ones, said Grindstaff. “We’ve worked together as partners for years, and Mentor has always been our favorite.”

Siemens PLM’s focus thus far has been on the mechanical side of engineering, such as computer aided designs and computer aided manufacturing. “With the Mentor acquisition, we can now assemble a full stack of software, mechanical and EDA tools, allowing our customers to connect the best tools,” he added.

Mentor’s Rhine agreed. The goal of the deal is to build a “Siemens PLM – Mentor platform” that enables product designs and makes production easier for customers, he explained.

What Siemens' Mentor Buy Means to IC Designers | EE Times

 

[nemgreen]

Siemens acquisition of Mentor closes
It's now "Mentor - A Siemens Business"

Open Letter to Customers - Mentor Graphics

 

[Daniel Payne]

Thanks for the news, so 12 months from now we'll be able to more clearly see how much autonomy Mentor has been given by Siemens in terms of product pricing, new product introductions, press releases and employee retention.