Acquisitions

12 Months Ended

Jan. 01, 2022

2021 Acquisitions

On February 23, 2021, Cadence acquired all of the outstanding equity of Belgium-based Numerical Mechanics Applications International SA (“NUMECA”). The addition of NUMECA’s technologies and talent supports Cadence’s Intelligent System Design™ strategy, servicing the computational fluid dynamics (“CFD”) market segment as part of System Design and Analysis. The aggregate cash consideration for Cadence’s acquisition of NUMECA, net of cash acquired of $9.6 million, was $188.6 million. Cadence expects to recognize expense for consideration paid to certain former NUMECA shareholders that is subject to service and other conditions, through the first quarter of fiscal 2023.

The total purchase consideration was allocated to the assets acquired and liabilities assumed with Cadence’s acquisition of NUMECA based on their respective estimated fair values on the acquisition date as follows:


	Acquisition Date Fair Value
	(In thousands)
Current assets	$	16,423
Goodwill	133,077
Acquired intangibles	72,200
Other long-term assets	6,928
Total assets acquired	228,628
Current liabilities	9,951
Long-term liabilities	20,475
Total liabilities assumed	30,426
Total purchase consideration	$	198,202

The recorded goodwill is attributed to intangible assets that do not qualify for separate recognition, including the acquired assembled workforce and expected synergies from combining operations of NUMECA with Cadence. Cadence expects all of the goodwill related to the acquisition of NUMECA to be deductible for tax purposes.

On April 14, 2021, Cadence acquired all of the outstanding equity of Pointwise, Inc. (“Pointwise”), a leader in mesh generation for CFD for cash consideration of approximately $31.4 million, net of cash acquired. The addition of Pointwise’s technologies and experienced team supports Cadence’s Intelligent System Design strategy and further broadens its System Design and Analysis portfolio, complementing its acquisition of NUMECA. The total purchase consideration was allocated to the assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition dates. Cadence recorded $16.7 million of definite-lived intangible assets and $16.7 million of goodwill with its acquisition of Pointwise. All of the goodwill related to Cadence’s acquisition of Pointwise is expected to be deductible for tax purposes.

Cadence completed two additional acquisitions during fiscal 2021. These acquisitions are not material to the consolidated financial statements.

Definite-lived intangible assets acquired with Cadence’s fiscal 2021 acquisitions were as follows:


	Acquisition Date Fair Value		Weighted Average Amortization Period
	(In thousands)		(in years)
Existing technology	$	59,100	13.7 years
Agreements and relationships	28,900		13.7 years
Tradenames, trademarks and patents	4,600		14.3 years
Total acquired intangibles with definite lives	$	92,600	13.7 years

2020 Acquisitions

In fiscal 2020, Cadence acquired all of the outstanding equity of AWR Corporation (“AWR”) and Integrand Software, Inc. (“Integrand”). These acquisitions enhanced Cadence’s technology portfolio to address growing radio frequency design activity, driven by expanding use of 5G communications.

The aggregate cash consideration for these acquisitions was $195.6 million, after taking into account cash acquired of $1.5 million. The total purchase consideration was allocated to the assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition dates. Cadence will also make payments to certain employees, subject to continued employment and other performance-based conditions, through the first quarter of fiscal 2023.

With its acquisitions of AWR and Integrand, Cadence recorded $101.3 million of definite-lived intangible assets with a weighted average amortization period of approximately nine years. The definite-lived intangible assets related primarily to existing technology and customer agreements and relationships. Cadence also recorded $119.4 million of goodwill and $25.1 million of net liabilities, consisting primarily of deferred tax liabilities, assumed deferred revenue and trade accounts receivable. The recorded goodwill was primarily related to the acquired assembled workforce and expected synergies from combining operations of the acquired companies with Cadence. None of the goodwill related to the acquisitions of AWR and Integrand is deductible for tax purposes.

Cadence completed one additional acquisition during fiscal 2020 that was not material to the consolidated financial statements.

Pro Forma Financial Information

Cadence has not presented pro forma financial information for any of the businesses it acquired during fiscal 2021 and fiscal 2020 because the results of operations for these businesses are not material to Cadence’s consolidated financial statements.

Acquisition-Related Transaction Costs

Transaction costs associated with acquisitions, which consist of professional fees and administrative costs, were not material during fiscal 2021, 2020 or 2019 and were expensed as incurred in Cadence’s consolidated income statements.