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Cadence Proposes to Acquire Mentor Graphics
June 17, 2008 |Estimated reading time: 3 minutes
Cadence Design Systems, Inc., announced that it submitted a proposal to the Board of Directors of Mentor Graphics Corporation to acquire Mentor Graphics for $16.00 per share in cash. Cadence's all-cash proposal, which is not subject to any financing condition, represents a 30% premium over the closing price of Mentor Graphics common stock on June 16, 2008, the last trading day prior to public disclosure of Cadence's proposal, a 59% premium over the closing price of Mentor Graphics common stock on May 2, 2008, when Cadence presented the terms of the proposal to Mentor Graphics, and a 46% premium over Mentor Graphics' average closing price for the past 30 trading days. The transaction price represents a total enterprise value of $1.6 billion on a fully diluted basis, which reflects Mentor Graphics' net debt of $69 million. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
"A combined Cadence-Mentor will offer customers a broader and more fully integrated product and technology portfolio in a time frame that better enables them to address urgent and complex challenges associated with their next-generation product development," said Michael J. Fister, president and chief executive officer of Cadence. "Together, we will accelerate the rate and efficiency of customers' innovation by making it possible for them to develop products that better meet end user needs."
"We believe the combination of Cadence and Mentor Graphics delivers significant benefits to both companies' shareholders that are simply too compelling to ignore," said Kevin S. Palatnik, senior vice president and chief financial officer of Cadence. "Our $16.00 per share all-cash proposal provides Mentor Graphics shareholders with a substantial cash premium for their investment in Mentor Graphics. It remains our strong preference to work cooperatively with Mentor Graphics, and to immediately commence discussions with Mentor Graphics regarding our proposal."
Cadence's proposal is subject to the negotiation of a mutually agreeable merger agreement, the completion of certain limited and confirmatory due diligence, and the satisfaction of other customary conditions, including receipt of regulatory approvals.
Deutsche Bank Securities Inc. is acting as financial advisor to Cadence and Davis Polk & Wardwell is acting as legal counsel.
Audio Webcast and Conference Call Information
Cadence will host an analyst and investor audio Webcast and conference call today, June 17, 2008, at 7:00 a.m. (Pacific)/10:00 a.m. (Eastern) to discuss the proposed transaction. Attendees are asked to dial into the conference call or register at the Web site at least 10 minutes prior to the scheduled Webcast. Webcast access and accompanying slides will be available at www.cadence.com/company/investor_relations. Please see the Web site for details on how to access the Webcast. The conference call can be accessed by dialing (888) 562-3356 (toll-free, <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />U.S.) or (973) 582-2700 (toll, international); the conference ID number is 52206067. An archive of the Webcast will be available starting today, June 17, 2008, at 10:00 a.m. (Pacific)/1:00 pm (Eastern) and ending at 8:59 p.m. (Pacific)/11:59 pm (Eastern) on Friday, June 20, 2008. The replay can be accessed through Cadence's Web site or by dialing (800) 642-1687 (toll-free, U.S.) or (706) 645-9291 (toll, international); the conference ID number is 52206067.
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(R) software and hardware, methodologies and services to design and verify advanced semiconductors, consumer electronics, networking and telecommunications equipment, and computer systems. Cadence reported 2007 revenues of approximately $1.6 billion, and has approximately 5,100 employees. The company is headquartered in San Jose, CA, 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.