Busn 101: After the M&A
* The pros and cons of pursuing venture capital to commercialize your intellectual property * Choreographing a career from college student to technical manager * Principles for building a successful EDA company This week's article looks at the dynamics of mergers and acquisitions with TransEDA CEO Jean-Luc Bouvresse. His view is one of integrating employees from several companies into one company, while also re-integrating the newly enhanced company into established and emerging markets. Jean-Luc indicates that these tasks require patience, hard work, and a positive outlook. ******************* TransEDA after the Merger
* The TransEDA website paraphrased - "Jean-Luc Bouvresse joined TransEDA as CEO in December 2003. Jean-Luc has 20+ years' experience at companies such as Intel, Apple, VLSI and Philips, as well as several years of start-up experience. Jean-Luc was an applications engineer, supervisor, business line manager, and an ASIC design center manager, before taking executive leadership positions in the organizations that he ran. His experience includes multiplying business results several times over and running companies with revenue of over US$800 million." * The October 2003 Press Release paraphrased - "TNI-Valiosys, a formal verification and validation solutions provider, today announced the acquisition of TransEDA, a leader in coverage and ready-to-use verification solutions for electronic designs. Both companies will merge their operations to provide solutions for the growing validation challenge. Under the agreement TNI-Valiosys acquired all the shares of TransEDA Technology Ltd. from TransEDA PLC." "TNI-Valiosys and TransEDA have decided to join forces to provide joint customers with a ready-to-use, structured verification environment. Both companies continue to operate, providing uninterrupted development and support of their complete product lines to their existing customer base. Following the merger, TNI-Valiosys’ and TransEDA’s personnel will be integrated into one single team and continue to operate from both companies’ existing R&D sites. Starting in Q1 2004 all TransEDA and TNI-Valiosys EDA products will be sold under the TransEDA name."
It was late afternoon in France, but early morning in California, when I spoke by phone with Jean-Luc Bouvresse. He was in France; I was in California. We talked about this past year, and the efforts and strategies required to make a success of the merger/acquisition that took place in October 2003. Jean-Luc said, "Our efforts have been directed at keeping the company ongoing, and building on a solid basis for the coming years. We have stabilized our product range and now are concentrating on stabilizing our performance. It is very easy to become 'de-focused' during a merger, as you try to bring together the different cultures of the different companies." "The people in the acquired company did not, by definition, choose to belong to the new company. They often suffer from a kind of culture shock. I have always felt that it's important to pay attention to that, particularly if the acquiring company wants to retain the people of the company that has been acquired." "If people [who are absorbed into a new company] are not comfortable, it is very easy to lose them. That is actually one of the main difficulties in a merger. Companies can lose a lot during the process, to become 'de-focused' as I said. You lose a lot of time if you do not quickly restabilize the new team." "You need to look at the value of each person, which is the single most important part of the merger. What does each employee bring to the new company and how can the company use those resources to the maximum benefit [of the organization]? How can the situation be structured so that each person feels useful in the new company?" "[These things] take a lot of time and energy, and a lot of discussion. It is important to the employees, plus it is very important not to lose customers because of the acquisition process. A company [that has resulted from a merger or acquisition] needs to be flexible. The management needs to be patient and analyze carefully what each company and its employees brings to the [new organization]." "I came to the company from the outside. I was not involved at TransEDA, nor at TNI-Valiosys, before I arrived at the beginning of this year. I started [my work here] by looking at the roadmap for the company. We looked at the technology, where we stand with the technology, at the market, and what our customers are looking for." "At DAC, we saw that there was a lot of assertion-based verification, so we knew the important thing was to understand how we could move the technology from classical coverage to formal verification and specification coverage." "We also saw a lot of interest in SystemVerilog and PSL, although I'm sure we can not forget SystemC. I do believe Verilog, VHDL, and SystemC are the main languages today, but there is a trend and an interest in SystemVerilog. When I was a Philips, we believed SystemC would be the language of design. Coming from the semiconductor industry as I do, I am very pragmatic. I believe there is good reason to use SystemC." "[In any case], we are taking care of what we have to today here in the company, and have all of the ingredients [in place] through our improved R&D for next year." "Verification is a nightmare because it's the most critical part of the design. You have to create a mask and there's a lot of money associated with that process. [In particular], it costs a lot to make a mask for a 90-nanometer chip. I believe today, that due to the evolution of the technology, the new tools, the higher levels [of abstraction], the different languages, and the DFM effects - there are so many ways to make things wrong." "IP is also [a challenge]. People [who work with IP] try to focus on the most important piece of their design. The complexity requires you to check your design many times. Perhaps you have a problem because someone changed something [in one of the blocks] without saying they did that." "Today, you see some parts of a design team doing the specification, others doing the design, and the third part of the team doing the verification. The question is how do you link these activities together? How can you measure the things that are being done? I do believe the technology and tools are there - the assertions are there - to link these things together." "Designs at 90 and 65 nanometers have already started, and the number of gates per square millimeter is huge - plus the amounts of memory on the chip. The issues you face at 90 or 65 nanometers are the same, however - to fill the chip with the most complex functions possible, but also to be able to verify the chip." "Now I see that in cell phones, the problems are so great, they're back to using 2 or 3 chips to solve [the integration issues], and to separate the analog from the digital part of the design. There are multiple arguments about using the lower-cost form [versus] adapting to the faster technology [of an integrated chip], but either way the world of design here is a complex one." "Today, you also see DFM mentioned often. [Clearly], if you don't take care of your factory problems, you don't make chips very well. The number of wafers and the yield may be low, perhaps because you have the design all wrong." "I'm a semiconductor guy running an EDA Company. Ten years ago, a lot of EDA companies wanted to tell me how to make a chip. They said they had solutions, but they missed completely the fact that they didn’t understand the metrology - measuring the success of the chip." "Now the EDA companies understand that their success will only come by working closely with the semiconductor companies. Last year, the EDA companies started trying to work more closely with the foundries and the semiconductor companies. Now they're trying to provide the tools that match the needs, and there's more and more understanding on all sides." "I still have a lot of contact with semiconductor people and I know that the semiconductor industry needs EDA tools. I believe my understanding [of the semiconductor industry] is very useful, as I try to bring my contributions to the design side at TransEDA. This is why the work and the technology are very interesting to me. I'm really excited about the technology and that's what I love about my work." "However, our customers ask, 'Can your technology contribute to my success?' The answer must be translated into the tools. [One reason] the market has been flat for EDA is because there has been too much focus on the technology. Now we need to start to focus on the customer's success. That is the truly interesting problem to solve." "At TransEAD, we plan to influence the methodology of verification, and we plan to be on the wave with our customers. We will work together as a team to provide the solutions, and the future will tell us if we're right." "We're smaller than some of our competitors, but my strategy is be a fully international company and to sell to a world wide market. To do that, we must focus on our product family and work with our customers to solve their problems." "I was impressed by Trans EDA, which is why I joined the company. Now we are working to find the right products to be sure that we lead once again in the coverage market. By the end of the next year, I believe all of our customers and our employees will be very happy."
November 30, 2004 Peggy Aycinena owns and operates EDA Confidential. She can be reached at peggy@aycinena.com
|