Synopsys completes acquisition of Coverity

Coverity products reduce the risk of quality and security defects, which can lead to the catastrophic failures that plague many of today's large software systems. Together, Synopsys and Coverity intend to improve software quality and help ensure mission-critical applications are built to withstand increasing security threats.

With this acquisition Synopsys enters a new, growing market geared toward enterprise IT and independent software providers in industries such as financial services, energy, entertainment and retail. The acquisition also opens up opportunities for Synopsys to increase its breadth and support to the semiconductor and systems space. To address the needs of software developers across the board, Synopsys will invest in delivering innovations in quality and security testing that can further reduce the risk of software failures and security breaches.  

Based on a preliminary analysis, due to the impact of purchase accounting and the associated deferred revenue haircut, Synopsys anticipates the acquisition to contribute approximately $20-25 million to fiscal 2014 revenue. Therefore, Synopsys would expect the transaction to be approximately $0.10-0.13 per share dilutive in fiscal 2014, be roughly neutral in the second half of fiscal 2015, and accretive in fiscal 2016 (all on a non-GAAP basis). Synopsys anticipates including specific guidance that includes the impact of Coverity when we report fiscal second quarter results in May.

Coverity will be led by John Chilton, senior vice president and general manager for Coverity.