Acquisitions pave TransEDA's path to profitability <!-- verification -->

Acquisitions pave TransEDA's path to profitability
By Peter Clarke, EE Times
September 11, 2001 (2:31 p.m. EST)
URL: http://www.eetimes.com/story/OEG20010911S0038

LONDON — Sales at TransEDA plc, an EDA verification vendor, jumped to $9.2 million for the fiscal year ended June 30, 2001, up 61 percent from the previous year. The revenue jump helped the company achieve a profit of $1.2 million before tax, compared with a loss of a $4,200 the previous year.

Acquisitions were key to the company's performance and will continue to be so in the year to come, said Ellis Smith, the company's president and chief executive officer.

TransEDA acquired DualSoft LLC (Nashua, N.H.) in December 2000 and iMODL Inc. (San Jose, Calif.) in March 2001, and during the year their rule-checking and testbench automation products have been incorporated into TransEDA's Verification Navigator design verification environment. iMODL had developed a range of Intel and MIPS processor core models and bus interface models.

"In just four months iMODL made a fairly substantial addition to our sales," said Smith. "We did more in the first three months [since iMODL became a part of TransEDA] than they did in the previous year. The mix of their technology and our customer base exceeded expectations."

Smith said TransEDA's sales increases were achieved despite the fact that the company has been migrating from a perpetual licensing model for its software to a time-based license. Time-based licensing over a few years diminishes the sales value recognized by an EDA company in the first year of a license but enhances the value achieved in succeeding years.

TransEDA has cash from its September 2000 listing on the London Stock Exchange's Alternative Investment Market, which generated cash through the financial year, Smith said.

Smith said he intends for TransEDA to continue to grow by acquisition. "It's a very good time to buy companies," he said. "There will be more consolidation in EDA."