Mentor Graphics Corporation Has acquired Valor Computerized Systems, Ltd. for net consideration valued at about $50 million. Mentor paid approximately 5.6 million shares of Mentor stock, valued at a little over $46 million at the close of yesterday's trading, and $32.5 million in cash. The total consideration paid to Valor is thus just under $80 million. Immediately prior to closing, Valor had cash of approximately $29 million. Valor's revenues for its last reported full year ending December 31, 2008 were approximately $40 million. So the price paid is twice the 2008 revenue number. Of course the fact that Valor had $29 million in cash further diminishes the value of the consideration to $50 million or roughly the 2008 revenues of the acquired company.

There had been rumors as early as at the 2008 DAC that Valor would have considered positively any attempts by Mentor to purchase the company, and a celestial alignment of planets has finally occurred. Valor's products target three key segments in the PCB manufacturing market: design of the physical layout of the PCB, fabrication of the bare PCB, and assembly of PCB components. With this acquisition Mentor now completes its coverage of the entire design, development, and manufacturing process for PCB.

"Valor's expertise and products in the manufacturing segment are an excellent fit to Mentor's in the PCB design area as together we provide a concept-through-manufacturing design solution to our customers," stated Henry Potts, vice president and general manager of the Systems Design Division of Mentor Graphics. "This acquisition will reinforce our number one position in PCB design while enabling Valor to leverage the strengths of Mentor and accelerate their delivery of differentiated design for manufacturing and manufacturing execution products."

Since Valor is headquartered in Tel Aviv, Israel, Henry Potts has chosen to created a new Valor division within his division and appoint Dan Hoz, former Valor CEO, as its general manager. After all fishing in Israel waters can get you in hot waters rather easily (Henry is an avid deep water fisherman).

The new division will be responsible for the development of solutions for the manufacturing market. Although the press release refers to the Valor division as "the newly-formed Valor division of Mentor Graphics", the fact is that this new division is within the System Design Division and Dan Hoz reports to Henry Potts, not to Greg Hinckley, President and effective COO of Mentor Graphics.