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Latest M&A …

Applied Wave Research, Inc. announced that AWR has acquired APLAC, a company that develops and markets simulation and analysis software for analog and RF design. The companies say that APLAC’s RF design technology "has been widely used by Nokia Mobile Phones for years, and has been used in designing over 30 percent of all mobile phone RF ICs worldwide.

I had a chance to speak with AWR CEO James Spoto on September 7th about the news. Here's what he told me:

"Here at AWR, we've established ourselves as a platform play in the industry. Our view is to really become a major player in this industry – and you do that by providing solutions – not just our own technology and tools, but also through deals with Synopsys, and other vendors."

"APLAC was a company that we knew was doing well in Europe with multiple Tier 1 accounts. However, they had no ability to grow beyond being a point-tool supplier on somebody else's platform. We saw that as a great opportunity for us to offer our own customers more choices, as well as to establish ourselves a more major player in Europe – to expand our company not just through internal development, but also through strategic acquisitions."

"A lot of the work that APLAC does complements our work here at AWR. We're proud of our simulation technology, but by combining our resources with the APLAC team, we've now got 15 to 20 people working in the areas of simulation and modeling. That makes ours one of the largest and most competent simulation teams in the industry – it's just a natural move for us to become a consolidator in the industry this way. From the perspective of APLAC and our as well, it was just a very attractive move to bring the two companies together. [In fact], the two companies have been in discussion for a year or two about integrating our technologies – what you're seeing in this announcement is a natural outcome of those discussions."

"APLAC is a company with 15 or 16 employees. They're profitable, have a strong technology base, and have an excellent relationship with Nokia and others. With this acquisition, AWR will now have approximately 80 people. The APLAC unit will remain in Finland and will be called AWR-APLAC. I look forward to getting to Finland next month to meet the team and to establish a joint vision and direction across the entire company."

"Our message is about unifying the design process from chip to package. It's an obvious strategy, but one that can be a real struggle for the big guys in the industry to achieve. They're not just integrating a few tools acquired through acquisitions, they're integrating hundreds of tools – those companies can become Towers of Babel in the process."

"Our process is a more integrated one. We're developing our tools through a seamless database integration that we believe will change the paradigm in the industry. There's a chance for somebody else to [establish dominance] in this industry. Magma's got a chance of taking over the digital stuff if they can get past their current legal action – but we believe we have an opportunity to become the leaders in the core areas of the foundation of the design flow. We're the only EDA company on the analog side with a unified database. We're going to be the next major design platform of choice in the industry."