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Verisity revenues grow as acquisition nears

Posted: 27 Jan 2005 ?? ?Print Version ?Bookmark and Share

Keywords:verification tool? cadence design systems? testbench automation?

Verification tool provider Verisity Ltd reported a 45 percent year-to-year revenue gain in the fourth quarter of 2004. But company officials are still saying little about the company's pending acquisition by Cadence Design Systems.

Verisity's fourth-quarter revenue was $17.8 million, with a GAAP net loss of $1.6 million. Total revenue for 2004 was $58 million, up from $48.5 million in 2003. Verisity projected first-quarter 2005 revenue of $17.8 to $18.2 million.

Cadence announced Jan. 12 that it had signed a definitive agreement to acquire Verisity for $12 per share in an all-cash deal estimated to be worth $285 million. The announcement drew mixed reviews from users and observers, some of whom questioned the future viability of Verisity's "e" verification language, and cited potential overlap between Verisity Axis and Cadence Quickturn emulators and accelerators.

In a Jan. 24 conference call, Charles Alvarez, Verisity CFO, said the company is "very limited" in what it can discuss about the upcoming merger. He noted that the merger is still subject to a number of regulatory conditions, and that Verisity is unable to answer questions about timing.

Moshe Gavrielov, Verisity CEO, said he was "very enthusiastic about Verisity's future with Cadence." In response to an analyst question, he said Verisity's tools will continue to operate with "all viable commercial simulators," including those from Synopsys and Mentor Graphics.

He also said the acquisition was a "financial decision made by the [Verisity] board. The board looked at the offer, the customer requirements, and the ability to project technology from an even broader platform, and the board felt this was the right thing to do."

Gavrielov said Verisity does not expect any changes in its product roadmap and is "committed to all products." He said Verisity has about 20,000 licenses of its Specman Elite testbench automation product, but declined to give a seat count for the Axis accelerators and emulators.

- Richard Goering

EE Times

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