Today Cadence announced massive revenue declines for the 4th quarter of 2008, http://biz.yahoo.com/iw/090204/0471345.html
At this rate of revenue decline it’s quite possible that Mentor will pass Cadence in 2009 as the new #2 EDA supplier. How sweet that would be for Mentor who wisely fought the hostile acquistion bid by Cadence in 2008.
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Mentor is officially the #2 EDA company.
According to published financial data Mentor’s revenue for the past 12 months were $850M, and Cadence had $1.04B.
Stay tuned for Mentor in 2009 to over take Cadence and become the #2 EDA company by revenue.
“How sweet that would be for Mentor who wisely fought the hostile acquistion bid by Cadence in 2008.”
I agree it would be sweet, but not for the investors who could have cashed out at $16/share whereas Mentor closed at $5.38 today. In retrospect, it’s doubtful that Cadence could have gotten the financing and FTC approval prior to the implosion of the markets in September. Still, Jerry Yang and Wally Rhines have a lot in common, except Wally still has his job.
Harry,
You are correct that Mentor share holder’s could have more money in their pockets had the Cadence merger gone through. The combined company stock price still would have lowered to the present levels in light of the global financial slow-down and $1B loss reported by Cadence.
Uh oh … I think you may have spoken too soon …
Mentor Expects To Miss Target
Harry,
Mentor expects to report $815M for 2009, not so bad. I think with the negative spiral that Cadence is in that Mentor still has a great shot at rising to the #2 EDA revenue position this year.
Interesting Perspective from Laurie Balch of http://www.GarySmithEDA.com on this topic in
http://www.solid-state.com/display_article/352882/5/none/none/TCHNE/EDA-emerging-from-worst-year-in-recent-history
However, a weak market wasn’t the main reason for the miserable 2008 — the severity of the slide in revenue can be attributed to an accounting mess at Cadence. After restating its earnings, Cadence is poised for a revenue decline of well over 40% in 2008. The company’s “confusion” in recognizing revenue from a number of subscription license sales caused a very significant hiccup to its top-line performance.
Cadence’s unsuccessful attempt to acquire Mentor Graphics was another key contributor to its lousy financial results. We believe that The company’s corporate leadership had been banking on the takeover of Mentor to cover its mismanagement of business fundamentals. Its core business health was likely in far more serious trouble than anyone had guessed, and the Mentor bid was a desperate attempt to regain some market strength. The accounting and management debacle has cost Cadence its top marketshare ranking (now behind both Synopsys and Mentor), and it now faces a tough road ahead to recover its former leadership spot.