Mentor purchases Exemplar

Electronic News, June 12, 1995 by Jeff Dorsch

WILSONVILLE, ORE.--Mentor Graphics has acquired Exemplar Logic, a supplier of programmable logic synthesis software for Unix and Windows platforms, in a stockswap merger valued at about $26 million. Exemplar will function as a wholly-owned subsidiary of Mentor, with much the same autonomy as Mentor's Model Technology and Anacad Electrical Engineering Software subsidiaries.

Mentor exchanged 1,512,146 shares of its common stock for all the shares in privately-held Exemplar, which is based in Alameda, Calif.

Exemplar provided a key technology element for Mentor's AutoLogic II synthesis package, introduced early this year (EN, Jan. 9). At the time, Mentor pointedly stressed that it only had a cash-for-technology agreement with Exemplar, and had no plans to acquire the company. Mentor first had OEM relations with three companies it acquired in the past 18 months--Model Technology, Anacad and CheckLogic Systems.

Vin Ratford, marketing manager for Mentor's ASIC/Programmable Logic & Test division, said the merger "creates a very, very strong synthesis team" to accommodate the "second wave" in designers--those designers moving from schematic-based methodology to design based on hardware description languages (HDLs). Compared with ASIC designers, there are three to four times the number of field programmable gate array (FPGA) designers, and many of those are making the methodology transition, according to Mr. Ratford.

Ewald Detjens, Exemplar's CEO, will become Mentor's chief technologist for synthesis. Robert Gardner, Exemplar's president, will become COO of the subsidiary, which will report to Pepe Piedra, the recently appointed VP and GM of the New Business Ventures division. Mr. Detjens, formerly of the University of California at Berkeley, founded Exemplar in 1987. Until earlier this year, the company was based in Berkeley, Calif.

The engineering teams of mentor and Exemplar had been working together since March, 1994 on an HDL language parser front-end which has been incorporated into both AutoLogic II and Exemplar's Galileo design environment. "The engineering teams worked together quite well," said Mr. Ratford. "It seemed a natural progression to merge the engineering teams."

Mr. Detjens said, "The engineering organizations have worked extremely well together. We do believe there is a bulking up that needs to be done in the synthesis area," which can be accomplished by the Mentor-Exemplar merger.

"We had a technology partnership," added Mr. Ratford. "As we got further into that partnership, we found there were more and more opportunities for the engineering teams. We discovered we had very, very complementary corporate cultures."

The Mentor-Exemplar combination provides "a credible alternative to Synopsys," which dominates the synthesis market, Mr. Ratford said. Mentor will continue to sell its AutoLogic II and Top-Down FPGA Station offerings, while Exemplar will continue to sell Galileo.

Mr. Ratford said the acquisition is "an enabling step for the Systems on Silicon Initiative," Mentor's new marketing theme. "This will accelerate use of programmable logic."

Exemplar just ended its fiscal year on May 31. Exemplar and Mentor executives declined to discuss the privately-held company's results, while industry sources indicated Exemplar had about $4 million in revenues for the year, $1 million shy of the target the company had set for itself.

Rita Glover of the EDA Today market research firm, praised the purchase as "a very strong move for Mentor...a good match to the Model Technology deal," concluded last December. "It gets them on the PC platform. Exemplar technology will also strengthen the Mentor PLD (programmable logic device) offerings. They've got a good migration path to ASICs."

She noted Mentor and Exemplar both have OEM relations with Minc, which supplies programmable logic place-and-route and fitting software. "It's going to be a killer combination," Ms. Glover said. "I'm sure (Synopsys is) going to be concerned about this Mentor-Exemplar combination."

Mentor said Exemplar will be free to maintain all of its present OEM relationships.

Suppliers of programmable logic also praised the merger.

"We are pleased that Mentor Graphics and Exemplar Logic have merged," said Curt Wozniak, president of Xilinx. "This merger will enable Mentor Graphics and Xilinx to better address the emerging FPGA high-level design market with the excellent technology that Exemplar Logic offers. Coupled with standards such as Vital, this merger provides our customers with broader access to technology and shorter design cycles for Xilinx' expanding portfolio of larger, more flexible devices."

"Exemplar Logic and Mentor Graphics have done a great job supporting Altera technology," said Erik Cleage, VP of marketing for Altera. "The merger of these companies represents an outstanding opportunity for our customers to leverage excellent synthesis technology in addressing their high-level design requirements, especially as Altera moves to higher densities and more complex architectures."