Synopsys, a maker of software used to design computer chips, has said it will acquire Avant, the troubled chip design software maker that earlier this year settled a criminal trade secrets case.
In an all-stock deal valued at around $769m, Synopsys will exchange 0.371 of its shares for each share of Avant.
In after-hours trading, Avant shares rose $4.95, or 45 per cent, to $15.90, while Synopsys shares tumbled by as much as 20 per cent, knocking $150m off the deal's valuation.
The acquisition, which is subject to approval by both companies' shareholders, is expected to close within the next three to six months.
Should the transaction not go through, Avant would be obligated to pay Synopsys a termination fee of $45m.
Semiconductor makers Motorola, nVidia, ST Microelectronics, Texas Instruments and TSMC all support the transaction.
Dave Mothersole, vice president of Motorola's semiconductor products sector, said in a statement: "We rely on Synopsys and Avant tools to produce increasingly complex systems-on-chip designs within ever shortening design cycles.
"I am delighted to see that Avant's products have found a new home at Synopsys and I expect we will see innovative technology and better design solutions as a result."
Avant has been under legal scrutiny since it was formed in 1991 by employees who jumped ship from market leader Cadence Design Systems.
Gerald Hsu, the company's founder and chief executive, entered a no contest plea to charges of conspiracy to misappropriate trade secrets, failure to return stolen property and securities fraud. Hsu, who remains Avant's chairman, was sentenced to three years probation and fined $2.7m.
The firm pleaded no contest to stealing software code and was fined $27m and ordered to pay Cadence $195m in restitution. It also had to pay $8.3m in fines against a second group of executives. Four primary defendants were all fined a total of over $5m.
A civil lawsuit filed by Cadence remains pending and Synopsys has taken out a $500m insurance policy against it.
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