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Cadence to Expand Verification Solution with Acquisition of Jasper Design Automation

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SAN JOSE, Calif., April 21, 2014 /PRNewswire/ -- Cadence Design Systems, Inc. (NASDAQ:CDNS), a leader in global electronic design innovation, today announced that it has entered into a definitive agreement to acquire Jasper Design Automation, Inc., a leading provider of formal analysis solutions, for approximately $170 million in cash. Jasper had approximately $24 million of cash, cash equivalents and short-term investments as of December 31, 2013.

Cadence Logo.

Jasper Design Automation is a market and technology leader in the fast-growing formal analysis sector, providing multiple verification solutions (Verification Apps) built on the JasperGold® platform. Jasper's customers include many of the top systems, semiconductor and IP companies. These companies, which are also Cadence customers, are increasingly adopting formal analysis to complement traditional verification methods, so as to better address the challenge of verifying increasingly complex and flexible IP designs and systems-on-chip (SoCs). With verification representing over 70% of the cost of developing a system-on-chip, it has become the top system and SoC development challenge and is the critical factor for time-to-market.

Jasper's technology strengths are highly complementary to Cadence's System Development Suite, which has been the standard bearer for integrated system verification solutions since 2011. The combination will expand differentiation of the industry's strongest and broadest system verification platform, and will be tightly integrated with Cadence's common debug analysis, formal and semi-formal solutions, simulation, acceleration, emulation and prototyping platforms, while leveraging its unified verification planning and metric-driven verification flow. In addition, the combination of extensive dynamic and formal VIP portfolios will be particularly well suited to enable embedded processor system verification.

"Jasper's products are recognized as the technology leaders in formal analysis, targeting complex verification challenges and increasing overall verification productivity," said Charlie Huang, senior vice president of the System & Verification Group and Worldwide Field Operations at Cadence. "Jasper's formal analysis solutions are used by customers today alongside Cadence's metric-driven verification flow to form a broad verification solution. We look forward to welcoming Jasper's strong formal development expertise and skilled team to Cadence."

The combination of Jasper and Incisive® Formal technologies and expertise will result in the most complete formal and semi-formal offerings in the industry. With its broader verification portfolio and worldwide field team, Cadence has the opportunity to accelerate the expansion of the emerging formal analysis sector as more mainstream customers adopt Verification Apps for IP and SoC development.

"Jasper and Cadence serve top-tier customers that will benefit from expanded formal technology and a broader, tightly-integrated verification solution," said Kathryn Kranen, president and CEO of Jasper. "The verification technologies, when combined, will benefit customers through a comprehensive metric-driven verification approach that unites formal and dynamic techniques, realizing the strength of each and leveraging the integration between them."

Cadence intends to finance the transaction with available cash and an existing revolving credit facility. The transaction is expected to close in the second quarter of fiscal 2014, subject to customary closing conditions including regulatory approvals. Cadence expects the transaction to be accretive to its non-GAAP earnings per share in fiscal 2015 after the impact of merger-related accounting. The impact on fiscal 2014 non-GAAP earnings per share will be provided when Cadence reports its second quarter fiscal 2014 financial results. The impact on GAAP earnings per share will be available after the completion of valuation and purchase accounting.

About Cadence
Cadence enables global electronic design innovation and plays an essential role in the creation of today's integrated circuits and electronics. Customers use Cadence® software, hardware, IP, and services to design and verify advanced semiconductors, consumer electronics, networking and telecommunications equipment, and computer systems. The company is headquartered in San Jose, Calif., with sales offices, design centers, and research facilities around the world to serve the global electronics industry. More information about the company, its products, and services is available at www.cadence.com.

This press release contains certain forward-looking statements, including statements above regarding Cadence's expected benefits of the pending acquisition of Jasper, when Cadence expects to complete the transaction, and the impact of the transaction to the customers of Cadence and Jasper and the global electronics industry, and Cadence's fiscal 2014 and 2015 earnings per share that are based on current expectations or beliefs, as well as preliminary assumptions about future events that are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These forward-looking statements are subject to numerous risks, uncertainties and other factors, many of which are outside Cadence's control, including, among others: (i) failure or inability to consummate the acquisition, effects of the acquisition on Cadence's financial results, the effect of regulatory approval requirements, the potential inability to successfully operate or integrate Jasper's business, including the potential inability to retain customers, key employees or vendors; (ii) the effect of the announcement of the acquisition on Cadence's and Jasper's respective businesses, including the possibility that the announcement may result in delays in customers' purchases of products or services; (iii) Cadence's ability to compete successfully in the electronic design automation product, design IP and commercial electronic design and methodology services industries; (iv) the success of Cadence's efforts to improve operational efficiency and growth; (v) the mix of products and services sold and the timing of significant orders for Cadence's products; (vi) change in customer demands, including those resulting from customer consolidation and the possibility that restructurings of customers and other efforts to improve operational efficiency by customers could result in delays in customers' purchases of products and services; (vii) economic and industry conditions in regions in which Cadence does business; (viii) fluctuations in rates of exchange between the U.S. dollar and the currencies of other countries in which Cadence and Jasper do business; (ix) capital expenditure requirements, legislative or regulatory requirements, interest rates and Cadence's ability to access capital and debt markets; (x) the acquisition of other companies or technologies or the failure to successfully integrate and operate these companies or technologies Cadence acquires, including the potential inability to retain customers, key employees or vendors; (xi) the effects of Cadence's efforts to improve operational efficiency on Cadence's business, including its strategic and customer relationships, and its ability to retain key employees; (xii) events that affect the reserves or settlement assumptions Cadence may take from time to time with respect to accounts receivable, taxes, litigation or other matters; and (xiii) the effects of any litigation or other proceedings to which Cadence is or may become a party. Cadence undertakes no obligation to update any forward-looking statement in this press release.

For a detailed discussion of these and other cautionary statements related to Cadence's business, please refer to Cadence's filings with the Securities and Exchange Commission. These include Cadence's most recent reports on Form 10-K and Form 10-Q, including Cadence's future filings.

© 2014 Cadence Design Systems, Inc. All rights reserved worldwide. Cadence, the Cadence logo and Incisive are registered trademarks of Cadence Design Systems, Inc. in the United States and other countries. Jasper Design Automation, the Jasper Design Automation logo, and JasperGold are trademarks or registered trademarks of Jasper Design Automation, Inc. All other trademarks are the property of their respective owners.

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SOURCE Cadence Design Systems, Inc.

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