The contract expands Cadence's solution portfolio to deliver competent and cost-effective system component modeling and IP integration. Both the Cadence and Denali boards of directors collectively accepted the transaction.

Lip-Bu Tan, president and chief executive officer of Cadence, in a statement stated "Denali's strengths in memory models, design IP and verification IP hasten the implementation of Cadence's freshly announced EDA360 vision, creating fresh opportunities for the company,"

In the same statement, Sanjay Srivastava, president and chief executive officer of Denali "Cadence is a leader in international electronic design and is the correct match for Denali and its employees. I am personally thrilled to be a part of the Cadence team and understand the EDA360 vision."

Cadence's EDA360 proposal centers on three components: system realization, SoC realization and silicon realization.

Denali's memory models facilitate to offer component modeling and verification at the system level; design IP contributes to the vision at the SoC level and support of third-party simulators supports the manufacture of silicon, Cadence said.

Cadence intends funding the contract with available cash. The transaction is anticipated to be accretive to Cadence's financial year 2011 earnings per share.