Magma Design Automation Inc., a chip design software company started by Rajeev Madhavan, was bought by Synopsys Inc., a maker of software for the design, verification and manufacture of electronic components and systems, for $523 million in cash. Madhavan will not be joining Synopsys, but will help with the transition as Magma is integrated into Synopsys.
Both companies are traded on the Nasdaq stock market. Synopsys is headquartered in Mountain View, Calif. Magma is headquartered in San Jose, Calif.
Synopsys is paying $7.35 per share in cash for Magma's stock.
The combination of Synopsys and Magma will enable the company to more rapidly meet the needs of leading-edge semiconductor designers for ever more sophisticated design tools, according to Synopsys.
Aside from Madhavan, the rest of Magma's senior management team, including President and Chief Operating Officer Roy Jewell, will join Synopsys.
Madhavan served as chairman and chief executive officer of Magma.
He founded Magma in 1997. The company, which went public in 2001, has over 1,000 employees worldwide. Customers included Broadcom Corp., Infineon Technologies, NEC Electronics, Samsung, Texas Instruments Inc. and Toshiba.
Madhavan came to the United States in 1986 after receiving a master's degree in electrical engineering from Queen's University in Ontario, Canada. A native of Kerala, Madhavan graduated with a bachelor's degree in electronics and communication from KREC in Surathkal.
Madhavan's professional career in Silicon Valley began with several research jobs. He came across chip design and started crafting software for it. This led him to co-found LogicVision Inc. in 1993. He served as the company's director of engineering for a year-and-a-half. He then left and co-founded Ambit Design Systems Inc., which was eventually bought by Cadence. With a growing reputation in chip-design software, Madhavan then founded Magma and was able to drum up some serious investor support. The company has received over $100 million in funding.
Growing up, Madhavan said, his choices were to be a doctor or an engineer. He admits that early in his life he wasn't the most focused worker, but an early manager of his really pushed him and jump-started his business spirit.