Synopsys, a company that provides tools and services for designing chips and electronic systems, said on Wednesday that it would acquire Coverity, a provider of software quality, testing, and security tools.
Under the terms of the agreement, Synopsys will pay approximately $375 million, or $350 million net of cash acquired. In addition, Synopsys said it would assume certain unvested stock options of Coverity employees.
Coverity makes tools to help developers reduce the risks associated with security defects in code, which can lead to the failures that plague many of today’s large software systems.
“The Coverity team has pioneered innovative technology aimed at the rapidly growing number of quality and security issues in complex software development. Their strong customer focus has been central to building an excellent business and we have relied on Coverity’s products for nearly 10 years,” said Aart de Geus, chairman and co-CEO of Synopsys. “Working together, Synopsys and Coverity intend to bring the software development process to the level of ‘first-time-right’ functionality that software design teams are striving for. For Synopsys this is a natural technology adjacency and the opening of a significant new, growing market space.”
The transaction will be funded by Synopsys with a combination of U.S. cash and debt, and is subject to Hart Scott Rodino regulatory review and other customary closing conditions. The acquisition is expected to close in Synopsys’ fiscal Q2, the company said.
Coverity has been developing technology to find and fix defects in software code before it is released, improving software security.
“Bringing together the Synopsys and Coverity teams opens up opportunities to increase penetration into the semiconductor and systems space where Synopsys excels,” the company said in a statement. “The acquisition also enables Synopsys to enter a new, growing market geared toward enterprise IT and independent software providers that Synopsys doesn’t currently address.”
Coverity says that its customer base includes nine of the top 10 software companies, seven of the top 10 aerospace and defense firms, eight of the top 10 global brands, and six of the top 10 semiconductor companies.
“To address increasing challenges related to software quality and security, Coverity created disruptive technology that inspects and analyzes the software code during development, allowing developers to fix quality and security defects before they become a problem,” said Anthony Bettencourt, CEO, president, and chairman of Coverity. “By merging with a trusted technology and market leader who has experience building powerful development tools, we expect to accelerate the evolution of this new paradigm to benefit more and more software developers.”
