Synopsys Snaps Up MorethanIP; Street Says Buy

Synopsys Inc has agreed to acquire MorethanIP. The latter provides Ethernet Digital Controller IP, which supports data rates of 10G to 800G. The terms of the transaction were not disclosed by the company.

Joachim Kunkel, General Manager of the Solutions Group at Synopsys (SNPS), said, “Hyperscale cloud data centers continue to evolve due to tremendous internet traffic growth, driving the need for high-speed interfaces to optimize data processing, networking, and storage in the cloud.”

Kunkel added, “The acquisition of MorethanIP enables us to build on our leading Ethernet IP portfolio and provide a complete controller and PHY Ethernet IP solution that addresses the performance and latency requirements of 200G/400G/800G cloud computing designs, while allowing customers to comprehensively meet their needs for high-quality IP solutions from a single, trusted supplier.” (See Synopsys stock analysis on TipRanks)

This acquisition expands Synopsys’ DesignWare Ethernet Controller IP portfolio and the acquired MAC and PCS IP complement the company’s current 112G Ethernet PHY IP solution. Synopsys expects the transaction to close in May.

Synopsys has a broad DesignWare IP portfolio and its IP Accelerated initiative includes IP prototyping kits, IP software development kits, and IP subsystems. This, coupled with technical support, helps designers to minimize integration risk and speed up the product time-to-market.

Recently, Needham analyst Richard Valera reiterated a Buy rating on the stock and increased the price target to $310 (20.1% upside potential) from $275.

Commenting on the company’s quarterly performance, Valera said, “With the company’s SIG business expected to gain steam as F21 progresses, and expectations for ongoing strength in its core business, underpinned by strong design activity in AI, 5G, HPC, and Auto, we see SNPS’ fundamental outlook as robust.”

Overall, the consensus among analysts is that Synopsys is a Strong Buy, based on 9 unanimous Buys. The average analyst price target of $318.89 implies an upside potential of 23.6%. Shares have gained about 91.7% over the past year.

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