Shares of Magma Design Automation (Nasdaq: LAVA) surged 25% after the company said it had agreed to be purchased by Synopsys Inc. (Nasdaq: SNPS) for $7.35 a share, or $507 million. Both companies make electronic design automation (EDA) software for semiconductor manufacturers.
As wireless device makers compete to create products with smaller and smaller chipsets, semiconductor makers are working to squeeze more transistors onto each chip, and to reduce the amount of power that each chip uses. “Magma and Synopsys have always shared a common goal of enabling chip designers to improve performance, area and power while reducing turnaround time and costs on complex ICs,” said Magma CEO Rajeev Madhavan.
Both Synopsys and Magma are based in California’s Silicon Valley. Synopsys had revenue of roughly $1.3 billion last year and employs about 6,700 people. Magma had revenue of $123 million in 2010 and employs about 700 people.
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