Cadence Design Systems, Inc. CDNS has signed a definitive agreement with Arm Holdings ARM to acquire its Artisan foundation IP business. The acquisition includes a suite of standard cell libraries, memory compilers and general-purpose I/Os (GPIOs), all finely tuned for advanced process nodes at leading global foundries. This move is expected to bolster Cadence’s rapidly growing IP portfolio, which already encompasses protocol and interface IP, SerDes IP, memory interface IP and embedded security IP.

The deal is expected to close in the third quarter of 2025, subject to regulatory approvals and customary conditions. Cadence noted that the transaction is not likely to significantly impact its revenues or earnings in the current fiscal year.

Cadence Design Systems, Inc. Price and Consensus

Cadence Design Systems, Inc. price-consensus-chart | Cadence Design Systems, Inc. Quote

What Does This Acquisition Offer?

The acquisition will strengthen Cadence’s presence in the system-on-chip (SoC) design ecosystem, helping it better support its customers in reducing time-to-market while optimizing power, performance and cost across leading semiconductor manufacturing processes. The deal is structured as an asset purchase agreement alongside a concurrent technology license agreement that will be finalized at closing, subject to existing rights.

As part of the transaction, Cadence will also onboard a highly skilled engineering team from Arm, which is known for its deep expertise and long-standing reputation in the IP industry. This talent acquisition is expected to further accelerate the development of existing and new IP products, supporting Cadence’s broader chiplet and design services initiatives.

Management highlighted the significance of the move, stating that the addition of Artisan IP and its team marks Cadence's entry into the foundation IP market. This step will allow Cadence to tap into new growth areas, expand its IP strategy and offer enhanced value through its integrated suite of tools, libraries and services, ultimately driving improved power, performance and area (PPA) metrics for customers.

Cadence Strengthens Portfolio With Key Buyouts

Strategic acquisitions have played a pivotal part in developing the company’s business in the last few years. In January 2025, Cadence,  inked a definitive agreement to acquire Secure-IC, a premium provider of embedded security IP platforms. The transaction is expected to close in the first half of 2025, subject to regulatory approvals and customary closing conditions.

In June 2024, Cadence completed the acquisition of Switzerland-based BETA CAE Systems International AG - a leading provider of engineering simulation solutions. The acquisition will likely enhance Cadence's Intelligent System Design strategy by broadening its range of multi-physics system analysis offerings and helping it enter into the structural analysis sector.

In January 2024, the company purchased California-based embedded software and system-level solutions provider Invecas, Inc. The Invecas buyout adds a skilled engineering team (based in Hyderabad, India), which will aid Cadence in offering its customers custom solutions across chip design, advanced packaging, product engineering and embedded software. Other notable acquisitions include Intrinsix (2023), Pointwise (2021) and NUMECA (2021). Cadence has expanded systems business through partnerships with leading companies like NVIDIA, GlobalFoundries and IBM.

CDNS’ Zacks Rank & Stock Price Performance

CDNS currently carries a Zacks Rank #3 (Hold). Shares of the company have lost 9.3% in the past year compared with the Zacks Computer – Software industry's decline of 4.2%.

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Stocks to Consider From the Computer Software Space

Some better-ranked stocks from the broader technology space are ACI Worldwide, Inc. ACIW and SAP SAP. ACIW sports a Zacks Rank #1 (Strong Buy), while SAP carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ACI Worldwide’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 161.34%. In the last reported quarter, ACIW delivered an earnings surprise of 36.71%. Its shares have surged 62.8% in the past year.

SAP’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing in one, with the average surprise being 6.38%. In the last reported quarter, SAP delivered an earnings surprise of 12.03%. The company’s long-term earnings growth rate is 10.1%. Its shares have advanced 45.8% in the past year.

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