Mentor Graphics - History

History

In 1981, the idea of computer-aided design for electronics as the foundation of a company occurred to several groups - those who founded Mentor, Valid Logic Systems, and Daisy Systems. One of the main distinctions between these groups was that the founding engineers of Mentor, whose backgrounds were in software development at Tektronix, ruled out designing and manufacturing proprietary computers to run their software applications. They felt that hardware was going to become a commodity owned by big computer companies, so instead they would select an existing computer system as the hardware platform for the Computer Aided Engineering (CAE) programs they would build.

By February 1981, most of the start-up team had been identified; by March, the three executive founders, Tom Bruggere, Gerry Langeler and Dave Moffenbeier had left Tektronix, and by May the business plan was complete. The first round of money, $1 million, came from Sutter Hill, Greylock, and Venrock Associates. The next round was $2 million from five venture capital firms, and in April 1983 a third round raised $7 million more. Mentor Graphics was one of the first companies to attract venture capital to Oregon.

Apollo Computer workstations were chosen as the initial hardware platform. Based in Chelmsford, Apollo was less than a year old and had only announced itself to the public a few weeks prior to when the founders of Mentor Graphics began their initial meetings.

When Mentor entered the CAE market the company had two technical differentiators: the first was the software - Mentor, Valid, and Daisy each had software with different strengths and weaknesses. The second, was the hardware - Mentor ran all programs on the Apollo workstation, while Daisy and Valid each built their own hardware for schematic capture, but ran simulation and other programs on larger computers such as the MicroVAX.

After a frenzied development, the IDEA 1000 product was introduced at the 1982 Design Automation Conference, though in a suite and not on the floor.

By the time founder Bruggere ran for the U.S. Senate in 1996, the company had grown to annual revenues of $384 million.

Mentor Graphics is a global company with product development taking place in the USA, Europe, Japan, Pakistan, India and Egypt. In keeping with global trends in software development, the company has a substantial labor force in lower cost locations such as Pakistan, India, Poland, Hungary and Egypt. James "Jim" Ready, one of the more colorful people in embedded systems, left Mentor in 1999 to form the embedded Linux company MontaVista. Neil Henderson, a pioneer in the royalty-free, source provided market space, joined Mentor Graphics in 2002 with the acquisition of Accelerated Technology Inc. Stephen Mellor, a leader in the UML space and co-originator of the Shlaer-Mellor design methodology, joined Mentor Graphics in 2004 following the acquisition of Project Technology.

As of 2012, Mentor's major competitors are: Cadence Design Systems, Synopsys and Zuken.

In June 2008, Cadence Design Systems offered to acquire Mentor Graphics in a leveraged buyout. On 15 August 2008, Cadence withdrew this offer quoting an inability to raise the necessary capital and the unwillingness of Mentor Graphics' Board and management to discuss the offer. Mentor acquired Flomerics Group plc for $60 million in cash in October 2008, and in August 2009, Mentor completed the acquisition of silicon manufacturing testing company LogicVision for $13 million in an all stock deal. Mentor completed the acquisition of Valor Computerized Systems in March 2010 in a cash and stock deal valued at $50 million.

On 22 February 2011, Carl Icahn, an activist investor, made an offer to buy the company for about $1.86 billion in cash in a move to push other suitors to declare themselves.