>>>TMAI seems like a successful and growing business. Why would they want to take on
the very significant litigaiton risk associated with AVNT? I have no trouble
understanding why a company that was all smoke and mirrors anyway would want to
do so, but I cannot understand the rationale for a successful company to willingly risk
everything when they are innocent of any wrongdoing. Note that although the deal is
structured as a merger of TMAI and a subsidiary of AVNT, the shareholders of TMAI
end up with AVNT paper. Typically in a deal of this kind there is a lockup on the
shares. The shareholders of TMAI could end up holding the AVNT shares through the
realization of the legal nightmare that may (I believe will) follow, and have shares at
the end of the day that are worth a lot less than their current TMAI paper. In my view
the recent runup in AVNT price may be linked to the desire of the brokers involved to
keep the price up until the deal closes so they can ensure their fees. <<<
The only thing I can think off is that TMAI would get access
to a much bigger market. TMAI's product is quite specialized and
therefore niched. The whole TCAD market is only about 40 million,
while the EDA sector 2+ billion market. Perhaps, they saw that
the litigation does not affect them because AVNT has established
themselves as a powerhouse in physical design. (The litigation
is will only affect the placement and route tools and nothing
else.) Maybe they event went ahead to conclude that even
if AVNT does not have a P&L product, they will still be a
force to contend with because they have diversified to an
area that CDN can't compete. Maybe AVNT's just has a
much better business plan and/or financial backing than
anyone else that have expressed interest in acquiring them.
Maybe they saw the backlog for rest of 97 and 98 that AVNT had
and their eyes lit up. Maybe it was the best decision for
their investors. I am not sure.
>>>>
Perhaps you could fill me in here. It was my impression that CDN and AVNT own the
place and route market. My thinking in making my earilier comment was that those
users that had to give up AVNT would have to go to CDN. Am I mistaken? Are there
other credible suppliers in this field?
Your thoughts would be appreciated.
Ron
<<<<
Here is my opinion. People go to AVNT because CDN
has become complacent in their product development and that
the sales and support have become less than accomidating.
Cell3 is really pretty old and buggy. Cooper and Chyang
P&L is a good product (acquired by CDN), but it is more useful
for global routing. AVNT is really the only company that
came out with new and improved technology. My impression
is that CDN is more interested in selling services than tools.
While company that has their own CAD group needed better tools,
AVNT clearly is making more effect to provide a "better" tool.
I am not saying it is necessarily technologically better, but
certainly something different from CDN which in itself is an
inherent value.
My point is, gaining a better financial position by
suing people is not going to win you customers. Better product
and services wins customers.
Other P&L suppliers, mentor graphics has a router
but it is pretty old. A small company called timberwolf
has a placement and routers too, but they are very small.
Other than that there is very little choice.
But to think that AVNT will drop out of P&L even if
if there is a ruling in favor of CDN is not realistic. AVNT
has within 2.5 years introduced three separate P&L product lines
(ArcCell, Aquarius, and the new ISS developed line). I don't
think they are giving up any time soon.
- Chung |
