Special Report: Buying And Selling EDA Companies

Buying companies is the easy part. Integrating them is the hard part. It’s also the point where most acquisitions that go awry actually run into problems.

There are widely different strategies for how to accomplish integration. Sometimes they work, other times they don’t. And sometimes both companies are surprised by the outcome—for better or worse.

“Either you think they’re going to work out and they don’t, or they work out vastly better than you would have thought,” said Wally Rhines, chairman and CEO of Mentor Graphics. “The biggest thing that can go wrong is when we don’t add the value that we think we’re going to add. So why are we valuable to a company? Frequently it’s the increased sales bandwidth. If we’re unable to add value, that’s a frequent cost of failure. Occasionally we have a cultural incompatibility, but that’s pretty rare. And you can tell who’s out to make a bunch of money and who’s going to stick around. You usually have a good idea of who’s motivated.”

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