High-tech

Due Diligence Update: Tenison EDA

By The Chilli analysts

Since September 2003, when Tenison EDA was profiled by The Chilli, the company has been steadily gaining traction throughout Europe, having secured a strategic deal with ARM, and has added French and German representation to cater for existing customer ST Microelectronics and to try and penetrate Infineon.

The company has also updated its product line and licensing model, to encourage low cost (one-off fee) distribution of final ('golden') reference models to end customers. It has altered the price of its products for generating new models (highest value, maybe one or two instantiations required) and executing models (lower value, but multiple instantiations required).

Tenison EDA has now embarked on a $5m round (expected to close Q3 2004) to fund its plans for the North American market, and to get an American based CEO on board. Jeremy Bennett, the current CEO, will take the role of Operations Director, and act as a bridge between the company's UK R & D centre and its largest target market in the USA. Explaining the rationale, Bennett says 'as an EDA company, we are most likely to exit through acquisition. The likely acquirers are all based in the West Coast, and we also see the USA as our largest target market, so it makes sense to set up a suitable operation over there, with appropriate infrastructure.

The company has also been gaining traction with partners such as Co-Ware and Cadence, by positioning itself as the solution to convert legacy IP into System C representation, for use with those vendors' tools.

The Chilli perspective: the company has done well to create a foundation in its own backyard, to both validate its product offering and build a customer support structure. It now makes sense to attack the US market from a position of strength with referenceable customers. Its potential investment partners should include US-based VC firms, who can add the extra value of bringing in local market knowledge and build a local operational and management team.

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© Chilli Publishing Ltd 2004

02JUNE2004