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ACQUISITIONS | 12 Months Ended
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Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
ACQUISITIONS | ACQUISITIONS 2024 Acquisitions Acquisition of BETA CAE On May 30, 2024, Cadence acquired all of the outstanding equity of BETA CAE, a system analysis platform provider of multi-domain, engineering simulation solutions. The aggregate purchase consideration for Cadence’s acquisition of BETA CAE, net of cash acquired of $91.3 million, was $1.14 billion. The aggregate purchase consideration was comprised of $638.2 million of cash and non-cash consideration of 1.74 million shares of Cadence common stock with an aggregate acquisition date fair value of $501.8 million. The addition of BETA CAE’s technologies and talent is expected to accelerate Cadence’s Intelligent System Design™ strategy by expanding its multiphysics system analysis portfolio and enabling entry into the structural analysis space. In connection with its acquisition of BETA CAE, Cadence paid an additional $55.8 million to a third-party escrow agent that will be released to certain former BETA CAE shareholders, subject to continued employment with Cadence, through the second quarter of fiscal 2026. The release of these funds is subject to continuous service and other conditions and is accounted for over the required service period as post-acquisition compensation expense in Cadence’s consolidated income statements. The total purchase consideration was allocated to the assets acquired and liabilities assumed with Cadence’s acquisition of BETA CAE based on their respective fair values on the acquisition date as follows:
| Fair Value
| (In thousands)
Current assets | $ | 118,676 |
Goodwill | 822,129 |
Acquired intangibles | 345,000 |
Other long-term assets | 18,198 |
Total assets acquired | 1,304,003 |
Current liabilities | 36,465 |
Long-term liabilities | 36,250 |
Total liabilities assumed | 72,715 |
Total purchase consideration | $ | 1,231,288 |
The recorded goodwill is attributed to intangible assets that do not qualify for separate recognition, including the acquired assembled workforce, and is expected to be deductible for U.S. income tax purposes. Definite-lived intangible assets acquired with Cadence’s acquisition of BETA CAE were as follows:
| Fair Value |  | Weighted Average Amortization Period
| (In thousands) |  | (in years)
Existing technology | $ | 140,000 |  |  | 6.0 years
Agreements and relationships | 190,000 |  |  | 15.0 years
Tradenames, trademarks and patents | 15,000 |  |  | 7.0 years
Total acquired intangibles with definite lives | $ | 345,000 |  |  | 11.0 years
Acquisition of Invecas, Inc. On January 8, 2024, Cadence acquired all of the outstanding equity of Invecas, Inc. (“Invecas”), a provider of design engineering, embedded software and system-level solutions. The aggregate cash consideration for Cadence’s acquisition of Invecas, net of cash acquired of $23.8 million, was $71.2 million. The acquisition adds a skilled system design engineering team to Cadence, with expertise in providing customers with custom solutions across chip design, product engineering, advanced packaging and embedded software. In connection with the acquisition of Invecas, Cadence paid an additional amount to a third-party escrow agent that will be released to certain former Invecas shareholders, subject to continued employment with Cadence, through the first quarter of fiscal 2028. The release of these funds is subject to continuous service and other conditions and is accounted for over the required service period as post-acquisition compensation expense in Cadence’s consolidated income statements. The total purchase consideration was allocated to the assets acquired and liabilities assumed with Cadence’s acquisition of Invecas based on their respective fair values on the acquisition date as follows:
| Fair Value
| (In thousands)
Current assets | $ | 50,608 |
Goodwill | 42,209 |
Acquired intangibles | 15,500 |
Other long-term assets | 7,414 |
Total assets acquired | 115,731 |
Current liabilities | 17,114 |
Long-term liabilities | 3,647 |
Total liabilities assumed | 20,761 |
Total purchase consideration | $ | 94,970 |
The recorded goodwill is attributed to intangible assets that do not qualify for separate recognition, including the acquired assembled workforce, and will not be deductible for tax purposes. The definite-lived intangible assets acquired with Cadence’s acquisition of Invecas include agreements and relationships of $15.0 million and tradenames of $0.5 million. These assets will be amortized over a weighted average life of 6.8 years. Other 2024 Acquisitions During the first three quarters of fiscal 2024, Cadence completed two other business combinations for aggregate cash consideration of $28.3 million, net of cash acquired. The total purchase consideration was allocated to assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition dates. Cadence recorded $5.5 million of definite-lived intangible assets with a weighted average amortization period of 4.9 years. Cadence also recognized $25.2 million of goodwill, which is primarily attributed to the assembled workforce of the acquired businesses. The goodwill recognized with these acquisitions is not expected to be deductible for tax purposes. 2023 Acquisitions Acquisition of IP Assets from Rambus Inc. On September 6, 2023, Cadence acquired the serializer/deserializer (“SerDes”) and memory interface physical layer (“Memory”) IP business from Rambus Inc. (“Rambus”) for an aggregate cash consideration of $108.6 million. Memory and SerDes IP design and integration continues to be integral to the design of artificial intelligence, data center and hyperscale applications, CPU architectures and networking devices. The addition of the Rambus IP and seasoned team accelerates Cadence’s Intelligent System Design strategy and strengthens Cadence's IP technology portfolio. The total purchase consideration was allocated to the assets acquired and liabilities assumed based on their respective fair values on the acquisition date as follows:
| Fair Value
| (In thousands)
Current assets | $ | 1,460 |
Goodwill | 80,999 |
Acquired intangibles | 26,000 |
Other long-term assets | 2,798 |
Total assets acquired | 111,257 |
Current liabilities | 2,531 |
Long-term liabilities | 142 |
Total liabilities assumed | 2,673 |
Total purchase consideration | $ | 108,584 |
The recorded goodwill is attributed to intangible assets that do not qualify for separate recognition, including the acquired assembled workforce, and will be deductible for tax purposes. Definite-lived intangible assets acquired with Cadence’s acquisition of the SerDes and Memory business from Rambus were as follows:
| Fair Value |  | Weighted Average Amortization Period
| (In thousands) |  | (in years)
Existing technology | $ | 16,700 |  |  | 5.0 years
Agreements and relationships | 9,300 |  |  | 7.0 years
Total acquired intangibles with definite lives | $ | 26,000 |  |  | 5.7 years
Acquisition of Pulsic, Ltd. On May 4, 2023, Cadence acquired all of the outstanding equity of Pulsic, Ltd. (“Pulsic”), a longtime provider of production-proven technology for floor-planning, placement, and routing of custom ICs. The addition of Pulsic’s technologies and experienced team supports Cadence’s Intelligent System Design strategy and strengthens Cadence’s Custom IC Design and Simulation technology portfolio. The aggregate cash consideration for Cadence’s acquisition of Pulsic, net of cash acquired of $3.8 million, was $56.1 million. Subject to service and other conditions, Cadence expects to recognize expense for consideration paid to certain former Pulsic shareholders, subject to continued employment with Cadence, through the second quarter of fiscal 2025. The total purchase consideration was allocated to the assets acquired and liabilities assumed with Cadence’s acquisition of Pulsic based on their respective fair values on the acquisition date as follows:
| Fair Value
| (In thousands)
Current assets | $ | 4,369 |
Goodwill | 47,448 |
Acquired intangibles | 12,400 |
Other long-term assets | 89 |
Total assets acquired | 64,306 |
Current liabilities | 1,553 |
Long-term liabilities | 2,885 |
Total liabilities assumed | 4,438 |
Total purchase consideration | $ | 59,868 |
The recorded goodwill is attributed to intangible assets that do not qualify for separate recognition, including the acquired assembled workforce, and is not deductible for tax purposes. Definite-lived intangible assets acquired with Cadence’s acquisition of Pulsic were as follows:
| Fair Value |  | Weighted Average Amortization Period
| (In thousands) |  | (in years)
Existing technology | $ | 8,000 |  |  | 6.2 years
Agreements and relationships | 4,100 |  |  | 8.0 years
Tradenames, trademarks and patents | 300 |  |  | 6.0 years
Total acquired intangibles with definite lives | $ | 12,400 |  |  | 6.8 years
Acquisition of Intrinsix Corporation On October 2, 2023, Cadence acquired all of the outstanding equity of Intrinsix Corporation (“Intrinsix”) from CEVA, Inc. The acquisition enhances Cadence’s system and IC design services resources with the addition of a team with expertise in advanced nodes, radio frequency, mixed-signal and security algorithms. The acquisition also expands Cadence’s reach in key high-growth vertical sectors, including aerospace and defense. The aggregate cash consideration for Cadence’s acquisition of Intrinsix was $34.6 million, net of cash acquired of $0.5 million. With its acquisition of Intrinsix, Cadence recorded $2.6 million of definite-lived intangible assets, $31.6 million of goodwill and $0.9 million net assets. The weighted average amortization period for the definite-lived intangible assets acquired with Cadence’s acquisition of Intrinsix was 5.0 years. The recorded goodwill is attributed to intangible assets that do not qualify for separate recognition, including the acquired assembled workforce, and is not deductible for tax purposes. 2022 Acquisitions Acquisition of OpenEye Scientific Software, Inc. On August 31, 2022, Cadence acquired all of the outstanding equity of OpenEye, a leading provider of computational molecular modeling and simulation software used by pharmaceutical and biotechnology companies for drug discovery. The addition of OpenEye’s technologies and experienced team with its deep scientific expertise is expected to accelerate Cadence’s Intelligent System Design strategy and broadens Cadence’s System Design and Analysis technology portfolio. The acquisition expands Cadence’s total addressable market, bringing Cadence’s computational software expertise to apply proven algorithmic, simulation and solver advances to life sciences. The aggregate cash consideration for Cadence’s acquisition of OpenEye, net of cash acquired of $13.2 million, was $461.3 million. Subject to service and other conditions, Cadence expects to recognize expense for consideration paid to certain former OpenEye shareholders, subject to continued employment with Cadence, through the first quarter of fiscal 2026. The total purchase consideration was allocated to the assets acquired and liabilities assumed with Cadence’s acquisition of OpenEye based on their respective estimated fair values on the acquisition date as follows:
| Fair Value
| (In thousands)
Current assets | $ | 24,890 |
Goodwill | 359,580 |
Acquired intangibles | 117,400 |
Other long-term assets | 6,542 |
Total assets acquired | 508,412 |
Current liabilities | 15,489 |
Long-term liabilities | 18,456 |
Total liabilities assumed | 33,945 |
Total purchase consideration | $ | 474,467 |
The recorded goodwill is attributed to intangible assets that do not qualify for separate recognition, including the acquired assembled workforce, and is not deductible for tax purposes. Definite-lived intangible assets acquired with Cadence’s acquisition of OpenEye were as follows:
| Fair Value |  | Weighted Average Amortization Period
| (In thousands) |  | (in years)
Existing technology | $ | 53,900 |  |  | 7.0 years
Agreements and relationships | 61,400 |  |  | 12.3 years
Tradenames, trademarks and patents | 2,100 |  |  | 7.0 years
Total acquired intangibles with definite lives | $ | 117,400 |  |  | 9.8 years
Acquisition of FFG Holdings Limited On July 14, 2022, Cadence acquired all of the outstanding equity of FFG Holdings Limited (“Future Facilities”), a provider of electronics cooling analysis and energy performance optimization solutions for data center design and operations using physics-based 3D digital twins. The addition of Future Facilities’ technologies and expertise supports Cadence’s Intelligent System Design strategy and broadens its System Design and Analysis technology portfolio with the addition of solutions that enable companies to make informed business decisions about data center design, operations and lifecycle management that reduce their carbon footprint. The aggregate cash consideration for Cadence’s acquisition of Future Facilities, net of cash acquired of $2.8 million, was $100.1 million. Subject to service and other conditions, Cadence expects to recognize expense for consideration paid to certain former Future Facilities shareholders, subject to continued employment with Cadence, subject to service and other conditions, through the third quarter of fiscal 2025. The total purchase consideration was allocated to the assets acquired and liabilities assumed with Cadence’s acquisition of Future Facilities based on their respective estimated fair values on the acquisition date as follows:
| Fair Value
| (In thousands)
Current assets | $ | 7,992 |
Goodwill | 67,219 |
Acquired intangibles | 38,100 |
Other long-term assets | 2,708 |
Total assets acquired | 116,019 |
Current liabilities | 4,952 |
Long-term liabilities | 8,167 |
Total liabilities assumed | 13,119 |
Total purchase consideration | $ | 102,900 |
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 Future Facilities with Cadence. The goodwill will not be deductible for tax purposes. Definite-lived intangible assets acquired with Cadence’s acquisition of Future Facilities were as follows:
| Fair Value |  | Weighted Average Amortization Period
| (In thousands) |  | (in years)
Existing technology | $ | 20,900 |  |  | 6.0 years
Agreements and relationships | 15,600 |  |  | 9.0 years
Tradenames, trademarks and patents | 1,600 |  |  | 8.0 years
Total acquired intangibles with definite lives | $ | 38,100 |  |  | 7.3 years
Other 2022 Acquisitions During fiscal 2022, Cadence completed three other business combinations for aggregate cash consideration of $53.6 million, net of cash acquired. The total purchase consideration was allocated to assets acquired based on their respective estimated fair values on the acquisition dates. Cadence recorded $23.1 million of acquired intangible assets, which consisted of $13.1 million of existing technology, $3.1 million of agreements and relationships, $0.1 million of tradenames, trademarks and patents, and $6.8 million of in-process technology. The weighted average amortization period for the definite-lived intangible assets acquired with these business combinations was 6.9 years. Cadence also recognized $29.5 million of goodwill, which is primarily attributed to the assembled workforce of the acquired businesses. Of the goodwill recognized with these acquisitions, $27.8 million is expected to be deductible for tax purposes. Pro Forma Financial Information Cadence has not presented pro forma financial information for any of the businesses it acquired during fiscal 2024, 2023 and fiscal 2022 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, are expensed as incurred and are included in general and administrative expense in Cadence’s consolidated income statement. During fiscal 2024, 2023 and 2022, transaction costs associated with acquisitions were $14.6 million, $12.1 million and $10.1 million, respectively.

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