The pace of the fast-growing electronic design automation market is hotting up with news of the acquisition of computer aided engineering firm HHB Systems Inc by the Racal Redac Group Ltd (CI No 1,190). It is the first move in a drive by the company to climb to the top of the ladder in this market, which is led by Daisy/Cadnetix Inc, Mentor Graphics and Valid Logic Systems. Bought for a snip at $19m – Cadnetix paid $77m for the same Mahwah, New Jersey based company only last year – HHB is to be operated as an autonomous division by its new parent, meaning that in some areas the two will be in open competition. However, as well as an improved computer aided engineering capability, and consolidating its future in the simulation market, HHB brings much needed distribution channels in the US and Asia to Racal Redac. HHB is the first in a series of acquisitions the Tewksbury, Gloucestershire-based company has planned for the coming months, to draw new products, distribution and service outlets into its stable. Up to now, computer-aided engineering sales have represented only about 20% of Racal Redac’s revenues. One immediate consequence of the new ownership is the integration of some development programs, which will lead to a new range of chip design tools by the end of the year, according to Dr Gary Vanstone, managing director of the Racal Redac group. In particular, a Virtual Hardware Description Language capability is to be added within its electronic design automation product environment. The language, for simulation techniques, has been adopted as a standard by the IEEE. There may also be some job losses from the US sales force of HHB during the restructuring process, a sales team already savaged from the loss of some 60% of its workforce when the Daisy bid for Cadnetix became apparent – HHB currently employs around 110 people worldwide. Pummelling A condition of the sale has been that Daisy will still take HHB products via an OEM agreement, and Racal Redac says it expects more OEM deals to be struck soon. HHB offers a range of computer aided engineering tools, the best-known of which is the Cadat logic simulator package for printed circuit board and application specific independent circuit design. NEC for example uses Cadat on around 300 chip designs a year. Products from Racal Redac and HHB are already compatible – work on integration has been going on for the last four years under the terms of an existing OEM agreement in which Racal bought in the Cadat package. They run on MS-DOS and VAX systems, 80386 Unix boxes and the RISC machines from DEC, Sun and Apollo. Sales to Racal Redac represented 17% of HHB’s total revenue last year, sales which have have taken a pummelling more recently, mainly attributed to the way the company has been passed around like a rag doll. HHB saw sales of only $5m for the entire first six months of the year, although these have picked up to $3.9m for the third quarter – break even point according to a company spokesman, and they are expected to reveal a rise again this quarter which ends July 1st. Revenue of the combined operations of the two firms is expected to be around $90m for the year. The CAD/CAE market is said to be forging ahead with growth rates of 30% a year or more, the printed circuit board market a less frenetic 15%, with Racal Redac claiming a 40% a year growth rate in its business to Japan, and 9,000 installations worldwide. In other news from Racal Redac, the company reports it has added Visula Plus to its Visula CAD/CAE/CAM suite. It enables printed circuit board designers to take advantage of multiple ‘panel’ manufacturing strategies, in which boards are made in multiple quantities on one sheet of laminate known as a panel, rather than singly.
