Innoveda Acquires PADS Software

Innoveda, Inc. announced that it has entered into a definitive merger agreement to acquire PADS Software, Inc., a privately held company. In the transaction, valued at approximately U.S. $32 million, a total of approximately 6.5 million shares of Innoveda stock and approximately U.S. $2 million will be exchanged for all PADS outstanding stock. In addition, Innoveda will assume all outstanding options to purchase PADS stock.

Together, the companies will be positioned to deliver a comprehensive environment for printed circuit board (PCB) and advanced IC packaging design, in addition to Innoveda's other environments for system-level design, design capture and electromechanical design. The environments are backed by Innoveda's comprehensive consulting services, and sold through an experienced worldwide direct sales force and Value Added Reseller (VAR) channel.

Innoveda is recognized as a leader in electronic product design solutions and PADS is widely recognized for its PCB design software. Both companies are leaders in the Electronic Design Automation (EDA) industry and provide software tools and services to engineers who design complex electronic systems sold by companies that participate in the telecommunications, computer, transportation and consumer electronics markets.

The announcement comes just two months after Viewlogic Systems, Inc. and Summit Design, Inc. completed their merger to become Innoveda.

Founded in 1986, PADS has grown its revenues an average of 23 percent annually for the past seven years, exceeding the growth of the overall EDA market during that period. The company achieved revenues of U.S. $25.7 million in 1999. PADS has a user base of 62,000 spanning 45 countries.

There will be no adjustment to merger consideration for changes in Innoveda stock price prior to the closing. The merger will be accounted for as a purchase. The boards of directors at both companies have approved the merger. It is subject to approval of PADS shareholders, customary SEC and other regulatory approvals, and closing conditions. The transaction is intended to qualify as a tax-free reorganization. Innoveda expects a one-time charge related to certain acquisition and related expenses in the quarter in which the transaction closes.

Edited by Bruce A. Bennett