As filed with the Securities and Exchange Commission on January 27, 1997
Registration No. 333-18445
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AVANT! CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-3133226
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1208 East Arques Avenue
Sunnyvale, California 94086
(408) 738-8881
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
GERALD C. HSU
Chairman of the Board, President and Chief Executive Officer
Avant! Corporation
1208 East Arques Avenue
Sunnyvale, California 94086
(408) 738-8881
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
ROBERT V. GUNDERSON, JR.
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP
155 Constitution Drive
Menlo Park, California 94025
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. |_|
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462 (b) under the Securities Act, please check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
<TABLE>
CALCULATION OF REGISTRATION FEE
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<CAPTION>
Title of each class of Securities Proposed Maximum Proposed Maximum Amount of Additional
to be Registered Amount to be Offering Price per Aggregate Offering Registration Fee
Registered Security (1) Price(1)
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<S> <C> <C> <C> <C>
Common Stock, $.0001 par value 1,857,211 shares(2) $37.50 $69,645,413 $327
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<FN>
(1) The price of $37.50 per share, which was the average of the high and low
prices of the Common Stock on The Nasdaq Stock Market on January 21, 1997,
is set forth solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) of the Securities Act of 1933, as amended. The
Registrant previously paid a registration fee of $16,208 in connection with
the initial filing of this registration statement. The additional
registration fee of $327 is for the registration of an additional 28,716
shares of Common Stock at a proposed maximum aggregate offering price of
$978,375.
(2) Includes 16,608 shares of Common Stock to be issued upon exercise of
certain rights on behalf of the Selling Stockholders.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
</FN>
</TABLE>
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<PAGE>
The information contained herein is subject to change, completion or amendment
without notice. A registration statement relating to these securities has been
filed with the Securities and Exchange Commission. These securities may not be
sold nor may an offer to buy be accepted prior to the time the registration
statement becomes effective. This prospectus shall not constitute an offer to
sell or the solicitation of an offer to buy, nor shall there be any sale of
these securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any
such state.
Subject to Completion, dated January 27, 1997
1,857,211 Shares
AVANT! CORPORATION
Common Stock
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This Prospectus relates to the public offering, which is not being
underwritten, of 1,857,211 shares (the "Shares") of Common Stock, $.0001 par
value (the "Common Stock") of Avant! Corporation ("Avant!" or the "Company").
The Shares are outstanding shares that may be sold from time to time by or on
behalf of certain stockholders of the Company (the "Selling Stockholders"). The
Selling Stockholders acquired the Shares in separate private transactions in
which the Company acquired FrontLine Design Automation, Inc. and NexSyn Design
Technology Inc.
The Shares may be offered by the Selling Stockholders from time to time
in transactions in the over-the-counter market, on the Nasdaq National Market,
in privately negotiated transactions, or by a combination of such methods of
sale, at fixed prices that may be changed, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Selling Stockholders may effect such transactions by
selling the Shares to or through broker-dealers and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the Selling Stockholders or the purchasers of the Shares for whom such
broker-dealers may act as agent or to whom they sell as principal or both (which
compensation to a particular broker-dealer might be in excess of customary
commissions). See "Selling Stockholders" and "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholders. The Company has agreed to bear certain
expenses in connection with the registration of the Shares being offered by the
Selling Stockholders. In addition, the Company has agreed to indemnify the
Selling Stockholders with respect to the Shares offered hereby against certain
liabilities, including certain liabilities under the Securities Act of 1933, as
amended (the "Securities Act"), or, if such indemnity is unavailable, to
contribute toward amounts required to be paid in respect of such liabilities.
On January 21, 1997, the average of the high and low price for the
Company's Common Stock was $37.50 per share. The Company's Common Stock is
traded on the Nasdaq National Market under the symbol "AVNT."
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The Selling Stockholders and any broker-dealers or agents that
participate with the Selling Stockholders in the distribution of the Shares may
be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act, and any commissions received by them and any profit on the
resale of the Shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
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THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 4.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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The date of this Prospectus is _______________, 1997
<PAGE>
AVAILABLE INFORMATION
Avant! is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, it files reports, proxy statements and other information
with the Securities and Exchange Commission (the "SEC"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the SEC at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's regional offices
located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and at Seven World Trade Center (13th Floor), New York, New
York 10048. Copies of such materials may be obtained by mail from the Public
Reference Section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The SEC also makes electronic
filings publicly available on the Internet within 24 hours of acceptance. The
SEC's Internet address is http://www.sec.gov. The SEC web site also contains
reports, proxy and information statements, and other information regarding
registrants that file electronically with the SEC. Avant! Common Stock is quoted
on the Nasdaq National Market, and the reports, proxy statements and other
information referred to above can also be inspected at the offices of Nasdaq
Operations, 1735 K Street, N.W., Washington, D.C. 20006.
Avant! has filed with the SEC a registration statement on Form S-3,
including this Prospectus and other information (herein, together with all
amendments, exhibits and schedules, referred to as the "Registration
Statement"), with respect to the Shares offered hereby. This Prospectus does not
contain all the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
SEC, and to which reference is hereby made. Statements made in this Prospectus
as to the contents of any document referred to are not necessarily complete.
With respect to each such document filed as an exhibit to the Registration
Statement, reference is made to the exhibit for a more complete description of
the matter involved, and each such statement shall be deemed qualified in its
entirety by such reference. The Registration Statement, including the exhibits
and schedules thereto, may be inspected at the public reference facilities
maintained by the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of such material may be obtained from the Public
Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates.
INFORMATION INCORPORATED BY REFERENCE
The following documents previously filed by the Company with the
Commission (File No. 0-25864) pursuant to the Exchange Act are incorporated
herein by reference:
1. The Company's Annual Report on Form 10-K, as amended, for the
year ended December 31, 1995, filed with the SEC on March 29,
1996;
2. The Company's Proxy Statement for the Annual Meeting of
Stockholders held on May 30, 1996, filed with the SEC on April
26, 1996;
3. The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996, filed with the SEC on May 14, 1996;
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4. The Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996, filed with the SEC on August 14, 1996;
5. The Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996, filed with the SEC on November 14,
1996; and
6. The Company's Current Reports on Form 8-K dated October 16,
1996, October 24, 1996, November 13, 1996, November 27, 1996
and December 20, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus but
prior to the termination of the offering to which this Prospectus relates shall
be deemed to be incorporated by reference in this Prospectus and to be part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, in its unmodified form, to
constitute a part of this Prospectus.
Upon written or oral request, the Company will provide without charge
to each person to whom a copy of the Prospectus is delivered a copy of the
documents incorporated by reference herein (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference
herein). Requests should be submitted in writing or by telephone at (408)
738-8881 to John P. Huyett, Chief Financial Officer, Avant! Corporation, 1208
East Arques Avenue, Sunnyvale, California 94086.
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RISK FACTORS
This Prospectus, including the documents incorporated by reference
herein, contains forward-looking statements that involve risks and
uncertainties. The statements contained in this Prospectus or incorporated by
reference herein that are not purely historical are forward-looking statements
within the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act, including without limitation statements regarding the Company's
expectations, beliefs, intentions or strategies regarding the future. All
forward-looking statements included in this document or incorporated by
reference herein are based on information available to the Company on the date
hereof, and the Company assumes no obligation to update any such forward-looking
statements. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth in "Risk Factors" and elsewhere in this Prospectus. In
evaluating the Company's business, prospective investors should consider
carefully the following factors in addition to the other information set forth
in this Prospectus and incorporated by reference herein.
Litigation Risk
On December 6, 1995, Cadence Design Systems, Inc. ("Cadence") filed an
action titled Cadence Design Systems, Inc. vs. Avant! Corporation, formerly
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AscSys, Inc.; Gerald C. Hsu; Mitsuru Igusa; Opher Segev; and Chih-Liang Cheng
- --------------------------------------------------------------------------------
against Avant! and certain of its officers in the United States District Court
for the Northern District of California alleging copyright infringement, unfair
competition, misappropriation of trade secrets, conspiracy, breach of contract,
inducing breach of contract and false advertising. The essence of the complaint
is that certain Avant! employees who formerly were Cadence employees allegedly
misappropriated and improperly copied source code for certain important
functions of Avant! place and route products from Cadence, and that Avant! has
allegedly competed unfairly by making false statements concerning Cadence and
its products. The action also alleges that Avant! induced certain individual
defendants to breach their agreements of employment and confidentiality with
Cadence. In addition to actual and punitive damages, which were not quantified
by Cadence, Cadence seeks to enjoin the sale of certain place and route products
and has filed a motion to obtain a preliminary injunction pending trial of the
action. Avant! filed its opposition to Cadence's motion on June 28, 1996.
Cadence filed a reply to Avant!'s opposition on August 27, 1996. The preliminary
injunction hearing took place on September 10, 1996. The court has the matter
under submission and there has been no ruling on Cadence's motion for a
preliminary injunction as of the date hereof.
On January 16, 1996, Avant! filed a counterclaim alleging antitrust
violations, racketeering, false advertising, defamation, trade libel, unfair
competition, unfair trade practices, negligent and intentional interference with
prospective economic advantage and intentional interference with contractual
relations. Although Avant!'s counterclaim seeks unquantified damages according
to proof, Avant! specifically alleges that it has suffered losses in excess of
$500 million. The alleged losses are due largely to the decline in Avant!'s
stock market valuation caused by Cadence's alleged misconduct.
The Santa Clara County District Attorney's office also is investigating
the allegations of misappropriation of trade secrets set forth in Cadence's
lawsuit, described above. On December 5, 1995, a search warrant was executed at
Avant!'s Sunnyvale, California, facility to determine whether there was evidence
of criminal conduct. No criminal charges have been filed against Avant!,
Avant!'s management or its employees, but no assurance can be given that such
charges will not be filed in the future. A criminal complaint, if filed against
Avant!, Avant!'s management or its employees, could result in a loss of
management and other personnel and could have other material adverse effects on
the Company. On December 15, 1995, Paul Margetis and Helen Margetis filed in the
United States District Court for the Northern District of California the
securities fraud class action complaint Paul Margetis and Helen Margetis, On
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Behalf of Themselves and All Others Similarily Situated vs. Avant! Corporation;
- --------------------------------------------------------------------------------
Gerald C. Hsu; Yuh-Zen Liao; and Stephen Tzyh-Lih Wuu. In addition, on December
- ------------------------------------------------------
19, 1995, Fred Tarca filed in the United States District Court for the Northern
District of California the class action complaint for violation of the federal
securities laws Fred Tarca, On Behalf of Himself and All Others Similarily
---------------------------------------------------------------
Situated vs. Avant! Corporation; Gerald C. Hsu; Yuh-Zen Liao; Stephen Tzyh-Lih
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Wuu; Jon A. Bode; Robert C. Kagle; Tench Coxe; Wessels, Arnold & Hendersen
- --------------------------------------------------------------------------------
L.L.C. and Alex. Brown & Sons. These class action lawsuits allege certain
- -------------------------------
securities law violations, including omissions and/or misrepresentation of
material facts. The alleged omissions and/or misrepresentations are largely
consistent with the allegations outlined in the Cadence claim. These class
action lawsuits are pending resolution of the litigation with Cadence.
When the lawsuits were originally filed against the Company, the
Company experienced delays in orders by customers due to the uncertainty of the
pending lawsuits against the Company. If the Company suffers an adverse outcome
in either the civil or criminal proceedings, then the Company would likely
experience future delays in orders from customers, and would likely suffer the
loss of customers. If such events were to occur, there would be a material
adverse effect on the Company's business, financial condition and results of
operations.
It is Avant!'s position that the plaintiffs' claims are without merit.
Avant! believes it has sufficient defenses to all of the plaintiffs' claims and
intends to defend itself vigorously. If, however, Avant!'s defenses are
unsuccessful, Avant! may be enjoined from selling certain place and route
products and may be required to pay damages to Cadence. In such event, Avant!'s
business, operating results and financial condition would be materially
adversely affected. In particular, Avant!'s place and route products in dispute,
ArcCell-BV and ArcCell-XO (which have been replaced by Aquarius-BV and
Aquarius-XO), accounted for approximately 20% of Avant!'s total supplemental
consolidated revenues for the three-year period ended December 31, 1995.
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<PAGE>
In addition, it is likely that an adverse judgment against Avant! would result
in a steep decline in the market price of Avant! Common Stock. Although the
Company believes, based on information it presently possesses, that the
conclusion of these claims will not have a material adverse effect on the
Company's supplemental consolidated financial position, there can be no
assurance that an adverse judgement, if granted, on any claim would not have a
material adverse effect on the Company's business, supplemental consolidated
financial position, or supplemental consolidated results of operations.
In the opinion of Avant! management, based on information it presently
possesses, the conclusion of these claims will not have a material adverse
effect on Avant!'s supplemental consolidated financial position.
Meta, a wholly owned subsidiary of the Company, has a long-standing
technology relationship with Cadence pursuant to which, among other things, Meta
and Cadence cross-license certain aspects of their respective technologies
including Meta's MASTER Toolbox and HSPICE products in order to develop certain
interfaces between Cadence's products and Meta's selling and supporting such
products. Meta licenses Cadence's maskwork layout software for use by Meta-Labs
services for generating maskworks for MetaTestchip. In light of Avant!'s pending
litigation with Cadence, it is almost certain that Cadence will sever its
relationship with Meta following the Meta Acquisition. In such event, Meta would
experience delays in generating new MetaTestchips as a result of the need to
transition to Avant!'s layout software. Further, Meta currently integrates a
portion of Cadence technology with HSPICE to provide a data output format for
Cadence's waveform viewing products and uses certain Cadence products to provide
Cadence product support for MASTER Toolbox which may no longer be available at a
reasonable price or profit after the Meta Acquisition. Additionally, Cadence
sells Spectre circuit simulation software which directly competes with Meta's
HSPICE product. Accordingly, termination of Meta's relationship with Cadence
could have a material adverse effect upon the Company's business, operating
results and financial condition.
The preceding pending litigation and any future litigation against the
Company or its employees, regardless of the outcome, is expected to result in
substantial costs and expenses to the Company and significant diversion of
attention by the Company's technical and management personnel. Accordingly, any
such litigation could have a material adverse effect on the Company's business,
operating results or financial condition.
Uncertainty Relating to Integration of Operations and Product Lines; Management
of Growth
The integration of Anagram's, Meta's and FrontLine's business and
personnel, which were acquired by Avant! in September 1996, October 1996 and
November 1996, respectively, presents difficult challenges for Avant!'s
management. Each of Avant!, Anagram, Meta and FrontLine entered into their
respective merger agreements with the expectation that their merger will result
in synergies for the Company. The Company, however, is more complex and diverse
than either Avant!, Anagram, Meta or FrontLine individually, and the combination
and continued operation of their distinct business operations will be difficult.
While the management and Boards of Avant!, Anagram, Meta and FrontLine believe
that the contemporaneous combination of Avant!, Anagram, Meta and FrontLine can
be effected in a manner that will realize the value of the Company, the
management group of the Company has limited experience in combinations of this
complexity or size. Accordingly, there can be no assurance that the process of
effecting these business combinations can be effectively managed to realize the
synergies anticipated to result therefrom.
Following the acquisition of Anagram, Meta and FrontLine (collectively,
the "Acqusitions"), in order to maintain and increase profitability, the Company
will need to successfully integrate and streamline overlapping functions.
Avant!, Anagram, Meta and FrontLine each have different systems and procedures
in many operational areas that must be rationalized and integrated. There can be
no assurance that such integration will be accomplished effectively,
expeditiously or efficiently. The difficulties of such integration may be
increased by the necessity of coordinating geographically separated divisions.
The integration of certain operations following the Acquisitions will require
the dedication of management resources that may temporarily distract attention
from the day-to-day business of the Company. The business of the Company may
also be disrupted by employee uncertainty and lack of focus during such
integration. Failure to effectively accomplish the integration of the operations
of Avant!, Anagram, Meta and FrontLine could have a material adverse effect on
the Company's business, operating results and financial condition. Moreover,
uncertainty in the marketplace or customer hesitation relating to the
Acquisitions could negatively affect the Company's business, operating results
and financial condition.
Avant!, Anagram, Meta and FrontLine entered into their respective
merger agreements in order to achieve potential mutual benefits from combining
each of their respective expertise and product lines for the physical design of
high-density, high-performance ICs. Realization of these potential benefits will
require, among other things, integrating the Company's respective product
offerings and coordinating the Company's sales and marketing and
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research and development efforts. Failure to efficiently achieve such
integration could have a material adverse effect on the Company's business,
operating results and financial condition.
Each of Avant!, Anagram, Meta and FrontLine has experienced periods of
rapid growth and expansion that has placed and will continue to place
significant strains upon their respective management systems and resources. In
addition, certain of the Company's senior management personnel have worked
together only for a short period of time and must learn to work together
effectively. The Company's ability to compete effectively and to manage future
growth, if any, will require the Company to continue to implement and improve
operational, financial and management information systems on a timely basis and
to expand, train, motivate and manage its work force. There can be no assurance
that the Company's personnel, systems, procedures and control will be adequate
to support the Company's operations.
Dependence Upon Key Personnel
The Company's future operating results depend in significant part upon
the continued service of its key management and technical personnel. Few of the
Company's employees are bound by employment or non-competition agreements, and
due to the intense competition for such personnel as well as the uncertainty
caused by the integration of Avant!'s, Anagram's, Meta's and FrontLine's
businesses, it is possible that the Company will be unable to retain such key
technical and managerial personnel. There are only a limited number of qualified
ICDA engineers, and competition for such individuals is intense. If the Company
is unable to attract, hire and retain qualified personnel in the future, the
development of new products and the management of an increasingly complex
business would be impaired, which would materially adversely affect the
Company's business, operating results and financial condition. Additionally, if
a criminal complaint is filed against the Company, the Company's management or
any of its employees relating to the matters underlying the pending litigation
between Avant! and Cadence, thereby resulting in a loss of Avant! personnel,
then the Company's business, operating results and financial condition may be
materially adversely affected. See "--Litigation Risk."
Competition
The ICDA software market in which Avant! competes is intensely
competitive and subject to rapid change. Avant! currently faces competition from
major ICDA vendors, including Cadence, which currently holds a dominant share of
the market for IC physical design software, Mentor Graphics Corporation
("Mentor"), Viewlogic Systems Incorporated ("Viewlogic") and EPIC Design
Technology, Inc. ("EPIC"). As the Company expands its product offerings to
include other library generation tools and other electronic design automation
("EDA") tools, it will compete increasingly with these established EDA vendors.
Certain of these established vendors have a longer operating history and
significantly greater financial, technical and marketing resources, greater name
recognition and a larger installed customer base than the Company. Each of these
competitors will likely be able to respond more quickly to new or emerging
technologies and changes in customer requirements and to devote greater
resources to the development, promotion and sale of their products than the
Company. Moreover, the industry in which the Company competes is undergoing a
trend toward consolidation that is expected to result in large, more financially
flexible competitors with a broad range of product offerings. In addition to
competition from EDA vendors, the Company also faces competition from
semiconductor companies that have internal design groups that develop their own
customized place and route and simulation tools for their own particular needs
and therefore may be reluctant to purchase products offered by the Company or
other independent vendors. There can be no assurance that the Company will be
able to compete successfully against current and future competitors or that
competitive pressures faced by the Company will not have a material adverse
effect on its business, operating results and financial condition. If the
Company is unable to compete successfully against current and future
competitors, the Company's business, operating results and financial condition
will be materially adversely affected.
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<PAGE>
Potential Fluctuations in Quarterly Results
The quarterly operating results of the Company may vary substantially
from period to period depending on factors such as the outcome of outstanding
litigation, increased competition, the size, timing and structure of significant
licenses, the timing of revenue recognition under its time-based license
agreements, the timing of new or enhanced product announcements, introductions,
or delays in the introductions, of new or enhanced versions of the Company's
products, changes in pricing policies by the Company or its competitors, market
acceptance of new and enhanced versions of the Company's products, the
cancellation of time-based licenses or maintenance agreements, the
unavailability of technology of third parties which is incorporated in certain
of the products of the Company, the mix of direct and indirect sales, changes in
operating expenses, changes in the Company's strategy, seasonal factors,
personnel changes, foreign currency exchange rates and general economic factors.
Due to the foregoing factors, and particularly the variability of the size,
timing and structure of significant licenses, quarterly revenue and operating
results are difficult to forecast. In particular, Avant! has adopted a flexible
pricing strategy pursuant to which Avant! offers both perpetual and time-based
software licenses to customers, depending on customer requirements and financial
constraints. Because each time-based license may have a different structure and
could be subject to cancellation, future revenue is unpredictable. In addition,
Meta's quarterly operating results have in the past fluctuated as a result of
seasonality of customer buying patterns, with revenues for the first quarter of
a year often lower than those for the last quarter of the preceding year, and a
significant portion of revenue in a quarter typically is received in the last
few weeks or days of that quarter. The Company's expense levels are based, in
part, on expectations as to future revenue levels. Accordingly, net income, if
any, may be disproportionately affected by a reduction in revenue because only a
small portion of the Company's expenses fluctuate with revenue. If revenue
levels are below expectations, the Company's business, operating results and
financial condition are likely to be materially adversely affected. Such
shortfalls in the Company's revenue or operating results from levels expected by
public market analysts and investors could have an immediate and significant
material adverse effect on the market price of Avant!'s Common Stock.
Additionally, the Company may not learn of such revenue shortfalls or earnings
shortfalls or other failures to meet market expectations for results of
operations until late in a fiscal quarter, which could result in an even more
immediate and material adverse effect on the trading price of Avant!'s Common
Stock. In such event, the market price of Avant!'s Common Stock would be
materially adversely affected. Due to the foregoing, Avant! believes that period
to period comparisons of its results of operations are not necessarily
meaningful and should not be relied upon as indications of future performance.
See "Selected Consolidated Financial Data."
Potential Volatility of Stock Price
The market price of Avant!'s Common Stock is likely to be highly
volatile and may be significantly affected by many factors, including the
outcome of outstanding litigation, actual or anticipated fluctuations in the
Company's operating results, announcements of technological innovations and new
products by competitors, new contractual relationships with strategic partners
by the Company or its competitors, proposed acquisitions by the Company or
competitors and financial results that fail to meet public market analyst
expectations of performance. In addition, the U.S. equity markets have from time
to time experienced significant price and volume fluctuations that have
particularly affected the market prices for the common stocks of technology
companies. These broad market fluctuations may materially adversely affect the
market price of Avant!'s Common Stock in future periods.
See "Market Price of Avant! Common Stock; Dividends."
Cost of Integration; Transaction Expenses
Transaction costs relating to the Acqusitions and the anticipated
combination of certain operations of Avant!, Anagram, Meta and FrontLine are
expected to result in one-time charges to the Company's earnings. Although it
will not be feasible to determine the actual amount of these charges until the
operational and transition plans are completed, the management of Avant!
believes that the aggregate charge will be approximately $8.9 million before
taxes, although such amount may be increased by unanticipated additional
expenses incurred in connection with the Acquisitions. This aggregate charge is
expected to include the estimated costs associated with financial advisory,
accounting and legal fees, printing expenses, filing fees and other
merger-related costs. While the
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exact timing of these expenses cannot be determined at this time, Avant!
incurred $920,000 of such costs in the quarter ended September 30, 1996 and the
management of Avant! anticipates the remaining charge to earnings will be
recorded in the quarter ending December 31, 1996. The effects of these costs
have not been reflected in the unaudited condensed combined statements of
income, except to the extent such costs were actually incurred in the quarter
ended September 30, 1996.
Potential Dilutive Effect to Stockholders
Although Avant! believes that beneficial synergies will result from the
Acquisitions, there can be no assurance that the combining of Avant!'s,
Anagram's, Meta's and FrontLine's businesses, even if achieved in an efficient
and effective manner, will result in combined results of operations and
financial condition superior to that which would have been achieved by each
company independently, or as to the period of time required to achieve such
result. The issuance of Avant! Common Stock in connection with the Acquisitions
is likely to have a dilutive effect on Avant!'s earnings per share and there is
no assurance that Avant! stockholders would not achieve greater returns on
investment were Avant! to remain an independent company.
Shares Eligible for Public Sale
Sales of substantial amounts of Avant! Common Stock in the public
market after the consummation of the Acqusitions could materially adversely
affect prevailing market prices of Avant!'s Common Stock. The shares of Avant!
Common Stock issued in the Acquisitions are eligible for immediate sale in the
public market, subject to certain limitations under the Securities Act
applicable to affiliates of the Company and certain agreements to be entered
into by certain affiliates of the acquired companies which prohibit such persons
from disposing of any Avant! Common Stock during the period immediately
following the respective closing of the transactions.
Product Concentration
The Company expects that revenue from the licensing and support of
Aquarius (formerly known as ArcCell), the Company's place and route software
product family, Hercules (formerly known as VeriCheck), the Company's design
verification software product, and ADM and HSPICE, the Company's circuit
simulation and analysis products, respectively, will account for a substantial
percentage of the Company's revenues for the foreseeable future. As a result,
the Company's business, operating results and financial condition are
significantly dependent upon continued market acceptance and purchases of
Aquarius, Hercules, ADM and HSPICE. A decline in demand for any of these
products as a result of competition, technological change or other factors would
have a material adverse effect on the business, operating results and financial
condition of the Company. There can be no assurance that Aquarius, Hercules, ADM
or HSPICE will achieve continued market acceptance, or that the Company will be
successful in marketing such products or any new or enhanced products. Failure
to develop or acquire additional products, or to successfully market such
products on a profitable basis, could have a material adverse effect on the
Company's business, operating results and financial condition.
Risks Associated with International Licensing
International revenue accounted for approximately 33% and 32% of the
Company's supplemental consolidated revenue in 1994 and 1995, respectively. The
Company primarily sells its products internationally in Japan, Korea and Taiwan.
The Company expects that international license and service revenue will continue
to account for a significant portion of the Company's total revenue. The
Company's international revenue involves a number of risks, including the impact
of possible recessionary environments in economies outside the U.S., longer
receivables collection periods and greater difficulty in accounts receivable
collection, difficulties in staffing and managing foreign operations, political
and economic instability, unexpected changes in regulatory requirements, reduced
protection of intellectual property rights in some countries and tariffs and
other trade barriers. Currency exchange fluctuations in countries in which the
Company licenses its products could also materially adversely affect the
Company's business, operating results and financial condition by resulting in
pricing that is not competitive with products priced in local currencies.
Furthermore, there can be no assurance
8
<PAGE>
that in the future the Company will be able to continue to price its products
and services internationally in U.S. dollars because of changing sovereign
restrictions on importation and exportation of foreign currencies as well as
other practical considerations. In addition, the laws of certain countries do
not protect the Company's products and intellectual property rights to the same
extent as do the laws of the U.S. Accordingly, there can be no assurance that
these factors will not have a material adverse effect on the Company's future
international sales and, consequently, on the Company's business, operating
results and financial condition. In addition, there can be no assurance that the
Company will be able to sustain or increase revenue derived from international
licensing and service or that the foregoing factors will not have a material
adverse effect on the Company's future international license and service
revenue, and, consequently, on the Company's business, operating results and
financial condition.
Dependence Upon Distributors and Manufacturer's Representatives
The Company relies on distributors and manufacturer's representatives
("Third Party Sellers") for licensing and support of its products in China,
Japan, Korea, Singapore and Taiwan. A substantial portion of Avant!'s
international license and service revenue results from a limited number of these
Third Party Sellers. During 1994 and 1995 revenue from three distributors and
two manufacturer's representatives accounted for an aggregate of approximately
11% of Avant!'s total supplemental consolidated revenue. There can be no
assurance that Avant!'s current Third Party Sellers will choose to or be able to
market or service and support the Company's products effectively, that economic
conditions or industry demand will not materially adversely affect these or
other Third Party Sellers or that these Third Party Sellers will not devote
greater resources to marketing and supporting products of the Company's
competitors. In particular, the Company has opened a sales office in Tokyo,
Japan, which may affect its relationship with a distributor and the
distributor's performance as a distributor of the Company's products.
Additionally, because the Company's products are used by highly skilled
professional engineers, a Third Party Seller must possess sufficient technical,
marketing and sales resources in order to be effective and must devote these
resources to a lengthy sales cycle, customer training and product service and
support. Only a limited number of Third Party Sellers possess such resources.
Accordingly, the loss of or a decision by Avant! not to renew agreements with,
or a significant reduction in revenue from, one of Avant!'s Third Party Sellers
or any other Third Party Sellers on which the Company's revenues may, in the
future, become dependent, could have a material adverse effect on the Company's
business, operating results and financial condition.
New Products and Rapid Technological Change
The ICDA industry is characterized by extremely rapid technological
change, frequent new product introductions and enhancements, evolving industry
standards and rapidly changing customer requirements. The Company's future
business, operating results and financial condition will depend in part upon its
ability to enhance its current products and to develop and introduce new
products on a timely and cost-effective basis that will keep pace with
technological developments and evolving industry standards and methodologies, as
well as address the increasingly sophisticated needs of the Company's customers.
New technologies developed by the Company or its competitors could render
existing products obsolete. The Company's success will depend upon its ability
to enhance existing products and to introduce new products on a timely and
cost-effective basis that meet changing customer requirements. There can be no
assurance that the Company will be successful in developing new products or
enhancing existing products or that such new or enhanced products will receive
market acceptance. On occasion, the Company has experienced delays in the
scheduled introductions of new and enhanced products, and there can be no
assurance that it will be able to introduce products on a timely basis in the
future. Delays in the scheduled availability of products, for technological or
other reasons, or a lack of market acceptance of such products, or the Company's
failure to accurately anticipate customer demand, would have a material adverse
effect on its business, operating results and financial condition.
Dependence Upon Semiconductor and Electronics Industries; General Economic and
Market Conditions
Avant! is dependent upon the semiconductor and, more generally, the
electronics industries. Each of these industries is characterized by rapid
technological change, short product life cycles, fluctuations in manufacturing
9
<PAGE>
capacity and pricing and gross margin pressures. Segments of these industries
have from time to time experienced significant economic downturns characterized
by decreased product demand, production over-capacity, price erosion, work
slowdowns and layoffs. Over the past few years, these industries have
experienced an extended period of significant economic growth, although during
1996 certain sectors of the semiconductor industry have experienced slower
growth than in 1995. There can be no assurance that economic growth in these
industries will continue, and if it does not, any downturn could be especially
severe on the Company. During such downturns, the number of new IC design
projects often decreases. Because acquisitions of new licenses from the Company
are largely dependent upon the commencement of new design projects, any slowdown
in these industries could have a material adverse effect on the Company's
business, operating results and financial condition. The Company's business,
operating results and financial condition may in the future reflect substantial
fluctuations from period to period as a consequence of patterns and general
economic conditions in either the semiconductor or electronics industry.
Limitations on Protection of Intellectual Property and Proprietary Rights
The Company relies on a combination of patents, trade secret, copyright
and trademark laws, as well as contractual commitments, to protect its
proprietary rights in its software products. The Company generally enters into
confidentiality or license agreements with its employees, distributors and
customers, and limits access to and distribution of its software, documentation
and other proprietary information. Despite these precautions, there can be no
assurance that a third party will not copy or otherwise obtain and use the
Company's products or technology without authorization, or develop similar
technology independently. In particular, the Company has on occasion distributed
its products pursuant to "shrink wrap" licenses, whereby the license agreement
covering the product is contained in the product packaging but is not signed by
the user. There can be no assurance that such licenses are enforceable. In
addition, effective copyright and trade secret protection may be unavailable or
limited in certain foreign countries. The Company expects that software
companies will increasingly be subject to infringement claims as the number of
products and competitors in the industry in which Avant! currently competes
grows and the functionality of products in different industry segments overlaps.
In particular, Avant!'s current litigation with Cadence involves such
infringement claims. Responding to such claims, regardless of merit, could be
time-consuming, result in costly litigation, cause product shipment delays or
require the Company to enter into royalty or licensing agreements. Such royalty
or licensing agreements, if required, may not be available on terms acceptable
to the Company or at all, which could have a material adverse effect upon the
Company's business, operating results and financial condition. There can be no
assurance that infringement claims will not be asserted against the Company in
the future or that any such claims will not require the Company to enter into
royalty arrangements or result in costly litigation, which could materially
adversely affect the Company's business, operating results and financial
condition. See "--Litigation Risk."
Risk of Product Defects
Software products as complex as those offered by the Company may
contain defects or failures when introduced or when new versions are released.
Avant! has in the past discovered software defects in certain of its products
and may experience delays or lost revenue to correct such defects in the future.
There can be no assurance that, despite testing by the Company, errors will not
be found in new products or releases after commencement of commercial shipments,
resulting in loss of market share or failure to achieve market acceptance. Any
such occurrence could have a material adverse effect upon the Company's
business, operating results and financial condition.
Dependence Upon Relationship with Synopsys
Avant! currently has a cooperative technical and marketing agreement
with Synopsys, Inc. ("Synopsys") that expires by its terms in March 1997, and is
automatically renewed for one year unless either party gives notice otherwise.
The agreement provides that Synopsys will share certain technical information
with Avant! concerning Synopsys' high level design automation products, which
information has assisted Avant! in the development and marketing of its
products. Synopsys has no obligation to continue to provide similar information
in the future, and if
10
<PAGE>
Synopsys were to stop sharing technical information with Avant!, to favor
competitors of Avant! or to develop software products that are competitive with
those of Avant!, Avant!'s business, operating results and financial condition
could be materially adversely affected. While Avant! believes its relationship
with Synopsys is good, there can be no assurance that the Acquisitons will not
have an adverse effect on the existing relationship with Synopsys.
Concentration of Stock Ownership; Change of Control Provisions
Based on the stock ownership of the Company as of November 30, 1996,
the directors and principal stockholders of the Company and their affiliates
will beneficially own a significant amount of the outstanding Avant! Common
Stock. As a result, these stockholders will be able to exercise significant
influence over all matters requiring stockholder approval, including the
election of directors and approval of significant corporate transactions. Such
concentration of ownership may have the effect of delaying or preventing a
change in control of Avant!. In addition, the Company's Board of Directors will
have the authority to issue up to 5,000,000 shares of Preferred Stock, to
determine the powers, preferences and rights and the qualifications, limitations
or restrictions granted to or imposed upon any unissued series of Preferred
Stock and to fix the number of shares constituting any series and the
designation of such series, without any further vote or action by the Company's
stockholders. The Preferred Stock could be issued with voting, liquidation,
dividend and other rights superior to the rights of the Common Stock. The
issuance of Preferred Stock under certain circumstances could have the effect of
delaying or preventing a change in control of the Company.
11
<PAGE>
THE COMPANY
Avant! develops, markets and supports integrated circuit design
automation ("ICDA") software for the physical design, layout, verification,
simulation and analysis of high-density, high-performance integrated circuits
("ICs"), commonly known as computer chips. Avant!'s objective is to establish a
significant market position as a supplier of physical design software (software
used to design the layout of transistors in a computer chip) for the ICDA
market. To achieve this objective, Avant! has adopted its mission, which is to
provide innovative technology, products, and business models that enable
customers to solve the toughest problems in deep submicron (less than 0.5-micron
or one-twenty thousandth of a centimeter feature size) IC design, improve their
productivity and achieve a high return on their investment. To effect its
mission, Avant! has adopted the strategies of maintaining focus on technological
innovation and creating strategic relationships with customers. The principal
executive offices of Avant! are located at 1208 East Arques Avenue, Sunnyvale,
California 94086. Avant!'s telephone number is (408)738-8881.
Recent Developments
On August 2, 1996 Avant! announced Version 2.0 of its deep submicron
product families which include the Aquarius family of place and route tools; the
Planet family of floorplanning tools; the Star family of simulation, timing,
analysis and RC extraction tools; the Solar family of synthesis-oriented layout
refinement tools; and the Hercules family of physical verification tools. The
Aquarius family consists of Aquarius-BV, which supersedes ArcCell-BV,
Aquarius-XO, which supersedes ArcCell-XO, and Aquarius-GA, which supersedes
ArcGate. The Hercules product family supersedes Avant!'s VeriCheck product
family. The Star family is a new product that analyzes the performance of deep
submicron ICs, including the most complex, high-performance microprocessors. The
Star product family is a full-chip extraction, delay analysis and data reduction
tool for IC designers to use during physical design. Star is tightly integrated
with Avant!'s hierarchical layout and verification tools, Aquarius and Hercules,
to provide efficient, accurate and predictable IC performance. The Solar family
is a new product that optimizes the performance and area of ICs to meet new deep
submicron "golden file" needs. Solar is tightly integrated with Avant!'s
Aquarius family of place and route tools.
In September 1996, Avant! acquired Anagram, Inc. ("Anagram"), a
developer of simulation and analysis ICDA software for high-performance deep
submicron ICs (the "Anagram Acquisition"). Anagram's objective is to establish a
significant market position as a supplier of easy-to-use, high-capacity circuit
simulation and high-accuracy timing analysis software. Anagram's flagship
product, ADM, is a high-capacity circuit simulator for deep submicron processor,
graphics, memory, communications, and mixed-signal IC designs. ADM is designed
to be compatible with the most commonly used ICDA tools and to be easily
integrated in the customer's existing design environment and methodology.
Anagram's products help increase IC performance and reliability and increase
designer productivity by enabling designers to characterize large blocks; to
accurately simulate mixed-signal, dynamic logic and memory circuits where
performance, signal integrity and power analyses are essential; and to reuse
high-performance intellectual property without changing the design process.
Anagram's ADM circuit simulation and analysis tool is currently being integrated
into the Star product family. Upon the closing of the Anagram Acquisition,
Anagram became a wholly owned subsidiary of Avant! and all of the fully-diluted
shares of Anagram capital stock and stock options were exchanged for an
aggregate of approximately 2,414,000 shares of Avant! Common Stock and Avant!
stock options. The Anagram Acquisition was accounted for as a pooling of
interests. See "Risk Factors--Uncertainty Relating to Integration of Operations
and Product Lines; Management of Growth," "--Cost of Integration; Transaction
Expenses" and "Avant! Business--Recent Developments."
In October 1996, Avant! acquired Meta-Software, Inc. ("Meta"), a
developer of library generation software products for use in IC design (the
"Meta Acquisition"). Meta's products include HSPICE, an industry leading circuit
simulator in use at over 1,500 commercial customer sites worldwide, and MASTER
Toolbox, an automated cell characterization and library generation program
introduced in late 1994. Meta's products assist IC designers in ascertaining
whether semiconductor devices based on their designs will meet functional and
performance specifications when fabricated in silicon. Avant! believes that
Meta's products can be used to reduce time to market, enhance IC performance,
lower design costs and validate designs across multiple foundries. Upon the
closing of the Meta Acquisition, Meta became a wholly owned subsidiary of Avant!
and all of the fully-diluted shares of Meta capital stock and stock options were
exchanged for an aggregate of approximately 5,080,000 shares of Avant! Common
Stock and Avant! stock options. The Meta Acquisition was accounted for as a
pooling of interests. See "Risk Factors--Uncertainty Relating to
12
<PAGE>
Integration of Operations and Product Lines; Management of Growth," "--Cost of
Integration; Transaction Expenses" and "Avant! Business--Recent Developments."
In November 1996, Avant! acquired FrontLine Design Automation, Inc.
("FrontLine"), a developer of Verilog simulation solutions to improve the
productivity of hardware logic designers (the "FrontLine Acquisition").
FrontLine has developed a unified HDL simulation architechture with Verilog
compatibility that offers (i) multiple levels of abstraction; (ii) multiple
simulation of algorithms; and (iii) multiple HDL compilation techniques.
FrontLine's products run on UNIX and Windows, and provide a multi-engine
architecture with high-performance cycle based and event driven simulation
support. The tools are used by designers of complex integrated circuits and
field programmable gate arrays to verify the functionality of their chips and
systems prior to manufacturing. Upon the closing of theFrontLine Acquisition,
FrontLine became a wholly owned subsidiary of Avant! and all of the
fully-diluted shares of FrrontLine capital stock and stock options were
exchanged for an aggregate of 2,222,222 shares of Avant! Common Stock and Avant!
stock options. The FrontLine Acquisition was accounted for as a pooling of
interests. See "Risk Factors--Uncertainty Relating to Integration of Operations
and Product Lines; Management of Growth," "--Cost of Integration; Transaction
Expenses" and "Avant! Business--Recent Developments."
In December 1996, Avant! acquired NexSyn Design Technology Inc.
("NexSyn"), a four-employee start-up company that is developing next-generation
EDA software tools (the "NexSyn Acquisition"). Upon the closing of the NexSyn
Acquisition, NexSyn became a wholly owned subsidiary of Avant! and all of the
fully-diluted shares of NexSyn capital stock and stock options were exchanged
for an aggregate of 51,282 shares of Avant! common stock and Avant! stock
options. The NexSyn Acquisition was accounted for using the purchase method of
accounting. Avant! expensed approximately $1.3 million in the fourth quarter of
1996 for the write-off of in-process research and development.
13
<PAGE>
MANAGEMENT
The executive officers and directors of Avant! are as follows:
Name Age Position
- ---- --- --------
Gerald C. Hsu 49 President, Chief Executive Officer and Chairman
of the Board of Directors
Y. Eric Cho 48 Senior Vice President of Corporate Operations
and Director
John P. Huyett 42 Chief Financial Officer and Treasurer
Shawn M. Hailey 46 Senior Vice President of Business Development
and Director
Eric A. Brill(1) 46 Director and Secretary
Tench Coxe(1) 37 Director
Tatsuya Enomoto 55 Director
- --------------
(1) Member of Audit and Compensation Committees.
Mr. Hsu joined Avant! in March 1994 as President, Chief Executive
Officer and a director, and has been Chairman of the Avant! Board of Directors
since November 1995. From July 1991 to March 1994, Mr. Hsu was employed by
Cadence, where his last position was President and General Manager of the IC
Design Group. From June 1988 to July 1991, Mr. Hsu was employed by Sun
Microsystems, Inc., an engineering workstation company, where his last position
was Director of Strategic Business Development. Mr. Hsu holds an S.M. in Ocean
Engineering from the Massachusetts Institute of Technology, an M.S. in Mechanics
and Hydraulics from the University of Iowa and a B.S. in Applied Mathematics
from the National Chung-Hsing University.
Dr. Cho co-founded Avant! in February 1991 and has been a director of
Avant! since such date. From January 1996 to the present, Dr. Cho has served as
the Senior Vice President of Corporate Operations. From October 1993 until
January 1996, he served as the Vice President of Asian Operations. From the
inception of Avant! until October 1993, Dr. Cho served as Vice President of
Sales and Marketing. From the inception of Avant! until November 1996, Dr. Cho
served as Secretary. From September 1986 to February 1991, Dr. Cho was employed
by Cadence where his last position was a Marketing Director of the IC Division.
Dr. Cho holds an M.B.A. from New York University, an M.S. and a Ph.D. in
Electrical Engineering and Computer Science from the University of California,
Berkeley and a B.S. in Electrical Engineering from the National Chiao-Tung
University, Taiwan.
Mr. Huyett has served as Chief Financial Officer and Treasurer since he
joined Avant! in connection with the merger of Integrated Silicon Solutions,
Inc. ("ISS") with and into Avant! in November 1995. From July 1993 to November
1995, Mr. Huyett served as Vice President of Finance and Chief Financial Officer
of ISS. Mr. Huyett also served as Treasurer and
14
<PAGE>
Secretary of ISS from October 1994 to November 1995. Prior to July 1993, Mr.
Huyett was a partner with KPMG Peat Marwick LLP, independent auditors to Avant!.
Mr. Hailey has served as Senior Vice President of Business Development
and a director since he joined Avant! in connection with the merger of Meta with
and into Avant! in October 1996. Mr. Hailey was the President, Chief Executive
Officer and Chairman of the Board of Directors of Meta since its inception in
1978. Prior to 1978, Mr. Hailey held engineering and management positions
involving circuit design at Advanced Micro Devices, Inc., where he established
the MOS Microprocessor Department and the EPROM group.
Mr. Brill has been the Secretary and director of Avant! since November
1996. Mr. Brill is a coporate and securities attorney whose practice focuses
principally on technology companies and private investment partnerships. He has
been in private practice since 1993, and previously practiced with the San
Francisco law firm of Farella, Braun & Martel. Mr. Brill holds a B.S. in History
from Cleveland State University and a J.D. from the Harvard Law School.
Mr. Coxe has been a director of Avant! since February 1992. Mr. Coxe is
a general partner of the general partner of Sutter Hill Ventures, a venture
capital investment firm, and has been associated with Sutter Hill Ventures since
1987. Mr. Coxe holds a B.A. in Economics from Dartmouth College and an M.B.A.
from the Harvard Business School.
Dr. Enomoto has been the President of Mitsubishi Electric Semiconductor
Software Corporation, a semiconductor engineering company and a subsidiary of
Mitsubishi Electric Corporation ("MELCO"), since June 1993. From 1962 to June
1993, Dr. Enomoto was employed by MELCO where his last position was General
Manager of the ASIC Design Engineering Center. Dr. Enomot holds a Ph.D. in
Engineering from the University of Tokyo.
15
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information, as of January 24,
1997, with respect to the number of shares of Common Stock owned by each of the
Selling Stockholders. All shares held by the Selling Stockholders as of January
24, 1997 are being offered for sale hereby. The Shares are being registered to
permit public secondary trading of the Shares, and the Selling Stockholders may
offer the Shares for resale from time to time. See "Plan of Distribution."
The Shares being offered by the Selling Stockholders were acquired from
the Company in the FrontLine Acquisition and the NexSyn Acquisition. The
Common Stock issued in the FrontLine Acquisition was issued pursuant to an
exemption from the registration requirements of the Securities Act provided by
Rule 506 under Regulation D, as promulgated by the Securities Act, and the
Common Stock issued in the NexSyn Acquisition was issued pursuant to an
exemption from the registration requirements of the Securities Act provided by
Section 4(2) thereof. Each Selling Stockholder that acquired Shares from the
Company represented to the Company that it was acquiring the Shares for
investment and with no present intention of distributing the Shares.
The Company has filed with the Commission, under the Securities Act, a
Registration Statement on Form S-3, of which this Prospectus forms a part, with
respect to the resale of the Shares from time to time on The Nasdaq Stock Market
or in privately-negotiated transactions. The Company has agreed to keep such
Registration Statement effective for two years from the date of effectiveness of
this Prospectus, subject to certain restrictions, or, if earlier, until the
distribution contemplated in this Prospectus has been completed.
<TABLE>
The Shares offered by this Prospectus may be offered from time to time
by the Selling Stockholders named below:
<CAPTION>
Shares Beneficially Owned
Prior to Offering
---------------------------
Number of Number of Shares
Name of Selling Stockholder Shares Percent Being Offered
- --------------------------- ------ ------- -------------
<S> <C> <C> <C>
Agarwala, Badruddin 83,657 * 83,657
Agarwala, Badruddin, Custodian for Lamya 51,899 * 51,899
Agarwala
Apte, Sushama, as Custodian for Amit Apte 6,393 * 6,393
Apte, Sushama, as Custodian for Salin Apte 6,227 * 6,227
Curtin, Richard 2,307 * 2,307
Desai, W.L. 1,262 * 1,262
Dholakia, Anjana 6,872 * 6,872
Dholakia, Ansum S. 13,839 * 13,839
Dholakia, Sachi S. 13,839 * 13,839
16
<PAGE>
Shares Beneficially Owned
Prior to Offering
----------------------------
Number of Number of Shares
Name and Address of Selling Stockholder Shares Percent Being Offered
- --------------------------------------- ------ ------- -------------
Dholakia, Suresh 94,614 * 94,614
Dixon, Scott 25,791 * 25,791
Duet Technologies, Inc. 6,560 * 6,560
Functionality, Inc.(1) 10,380 * 10,380
Goel Family Partnership 512,173 2.3 512,173
Goel Pooneet 155,697 * 155,697
Goel Priyanka 155,697 * 155,697
Holland, Sheila 5,189 * 5,189
Hsu, Yu-Chin 14,358 * 14,358
Jhaveri, D.J. 17,299 * 17,299
Jhaveri, J.B. 20,413 * 20,413
Jhaveri, Krishna 118,142 * 118,142
Jhaveri, Neeta 10,379 * 10,379
Jhaveri, Krishna, as Custodian for Kunal 25,949 * 25,949
Jhaveri
Jhaveri, Krishna, as Custodian for Ruchi 25,949 * 25,949
Jhaveri
Jinjuvadia, Kusum R. 13,839 * 13,839
Kaul, Sanjiv 8,649 * 8,649
Khorakiwala, Taizoon 25,949 * 25,949
Mehta, P.J. 17,299 * 17,299
Mehta, V.P. 17,299 * 17,299
Mody, Arti 1,682 * 1,682
Mody, C.J. 34,599 * 34,599
Mody, N.C. 34,599 * 34,599
Mody, Rajiv C. 121,948 * 121,948
Mody, Rajiv, as Custodian for Naman Mody 25,949 * 25,949
17
<PAGE>
Shares Beneficially Owned
Prior to Offering
----------------------------
Number of Number of Shares
Name and Address of Selling Stockholder Shares Percent Being Offered
- --------------------------------------- ------ ------- -------------
Mody, Rajiv, as Custodian for Sakhee Mody 25,949 * 25,949
Pacific Design, Inc.(2) 11,793 * 11,793
Rajpura, Bakul D. 13,839 * 13,839
Rajpura, Bharti B. 13,839 * 13,839
Samejima, Muneyoshi 86,061 * 86,061
Shar, Leonard E. 2,075 * 2,075
Tsia, Fur-Shin 14,358 * 14,358
Vaidyanathan, Vijay 830 * 830
ZyMac 1,729 * 1,729
<FN>
- -------------------
* Less than 1%
(1) These shares of Common Stock may be acquired upon the exercise of certain
rights, which rights have not fully vested as of the date hereof.
(2) Includes 6,228 shares of Common Stock which may be acquired upon the
exercise of certain rights, which rights have not fully vested as of the
date hereof.
</FN>
</TABLE>
18
<PAGE>
PLAN OF DISTRIBUTION
All or a portion of the Shares offered hereby by the Selling
Stockholders may be delivered and/or sold from time to time in transactions in
the over-the-counter market, on the Nasdaq National Market, in privately
negotiated transactions, or by a combination of such methods of sale, at fixed
prices that may be changed, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. After
the effectiveness of the Registration Statement of which this Prospectus is a
part, the Selling Stockholders may make short sales of the Company's Common
Stock and may use the Shares to cover the resulting short positions. The Selling
Stockholders may effect such transactions by selling the Shares to or through
broker-dealers and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders or the
purchasers of the Shares for whom such broker-dealers may act as agent or to
whom they sell as principal or both (which compensation to a particular
broker-dealer might be in excess of customary commissions). The Selling
Stockholders and any broker-dealers that participate in the distribution may
under certain circumstances be deemed to be "underwriters" within the meaning of
the Securities Act, and any commissions received by such broker-dealers and any
profits realized on the resale of Shares may be deemed to be underwriting
discounts and commissions under the Securities Act. The Selling Stockholders may
agree to indemnify such broker-dealers against certain liabilities, including
liabilities under the Securities Act. In addition, the Company has agreed to
indemnify the Selling Stockholders with respect to the Shares offered hereby
against certain liabilities, including certain liabilities under the Securities
Act, or, if such indemnity is unavailable, to contribute toward amounts required
to be paid in respect of such liabilities.
Any broker-dealer participating in such transactions as agent may
receive commissions from the Selling Stockholders (and, if it acts as agent for
the purchase of such Shares, from such purchaser). Broker-dealers may agree with
the Selling Stockholders to sell a specified number of Shares at a stipulated
price per share, and, to the extent such a broker-dealer is unable to do so
acting as agent for the Selling Stockholders, to purchase as principal any
unsold Shares. Broker-dealers who acquire Shares as principal may thereafter
resell such Shares from time to time in transactions (which may involve crosses
and block transactions and which may involve sales to and through other
broker-dealers, including transactions of the nature described above) in the
over-the-counter market, on the Nasdaq National Market, in privately negotiated
transactions, or by a combination of such methods of sale, at fixed prices that
may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices, and in
connection with such resales may pay to or receive from the purchasers of such
Shares commissions computed as described above.
The Selling Stockholders will be subject to applicable provisions of
the Exchange Act, and the rules and regulations thereunder, including, without
limitation, Rules 10b-6 and 10b-7, which provisions may limit the timing of bids
for and purchases of shares of the Company's Common Stock by the Selling
Stockholders.
The Selling Stockholders will pay all commissions and other expenses
associated with the sale of securities by them. The Shares offered hereby are
being registered pursuant to contractual obligations of the Company, and the
Company has agreed to bear certain expenses in connection with the registration
and sale of the Shares being offered by the Selling Stockholders. The Company
has not made any underwriting arrangements with respect to the sale of Shares
offered hereby.
LEGAL MATTERS
The legality of the securities offered hereby will be passed upon for
the Company by Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP,
Menlo Park, California.
19
<PAGE>
EXPERTS
The consolidated balance sheets of Avant! Corporation and subsidiaries
as of December 31, 1994 and 1995 and the consolidated statements of income,
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1995 incorporated in this Prospectus by reference from
the Company's Form 8-K filed on December 19, 1996 have been audited by KPMG Peat
Marwick LLP, independent certified public accountants, and are incorporated
herein by reference in reliance upon the report of KPMG Peat Marwick LLP, and
upon the authority of such firm as experts in accounting and auditing.
The supplemental consolidated balance sheets from Avant! Corporation
and subsidiaries as of December 31, 1994 and 1995 and the supplemental
consolidated statements of income, stockholders' equity, and cash flows for each
of the years in the three-year period ended December 31, 1995 incorporated in
this Prospectus by reference from the Company's Form 8-K filed on December 19,
1996 have been audited by KPMG Peat Marwick LLP, independent certified public
accountants, and are incorporated herein by reference in reliance upon the
report of KPMG Peat Marwick LLP, and upon the authority of such firm as experts
in accounting and auditing.
20
<PAGE>
No dealer, salesperson, Selling Stockholder or
any other person has been authorized to give any
information or to make any representations in
connection with this offering other than those
contained in this Prospectus and, if given or
made, such information or representations must 1,857,211 Shares
not be relied upon as having been authorized by
the Company, any Selling Stockholder or by any
other person. This Prospectus does not constitute
an offer to sell or a solicitation of any offer
to buy any of the securities offered hereby by
anyone in any jurisdiction in which such offer or
solicitation is not authorized or in which the
person making such offer or solicitation is not
qualified to do so or to any person to whom it is AVANT! CORPORATION
unlawful to make such offer or solicitation.
Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any
circumstances, create any implication that the
information contained herein is correct as of any
time subsequent to the date of the Prospectus.
Common Stock
----------------------------
-------------
TABLE OF CONTENTS
Page ___________, 1997
----
Available Information 2 --------------
Information Incorporated by Reference 2
Risk Factors 4
The Company 12
Management 14
Selling Stockholders 16
Plan of Distribution 19
Legal Matters 19
Experts 20
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The fees and expenses incurred by the Company in connection with the
offering are payable by the Company and, other than filing fees, are estimated
as follows:
Securities and Exchange Commission Registration Fee...... $ 16,535
Legal Fees and Expenses.................................. 75,000
Accounting Fees and Expenses............................. 130,000
Miscellaneous............................................ 53,465
--------
Total............................................... 275,000
========
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation law ("DGCL") empowers a
Delaware corporation to indemnify any persons who are, or are threatened to be
made, parties to any threatened, pending or completed legal action, suit or
proceedings, whether civil, criminal, administrative or investigative (other
than action by or in the right of such corporation), by reason of the fact that
such person was an officer or director of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided that such officer or director acted in good faith and in a
manner he reasonably believed to be in or not opposed to the corporation's best
interests, and, for criminal proceedings, had no reasonable cause to believe his
conduct was illegal. A Delaware corporation may indemnify officers and directors
in an action by or in the right of the corporation under the same conditions,
except that no indemnification is permitted without judicial approval if the
officer or director is adjudged to be liable to the corporation in the
performance of his duty. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director actually and reasonably incurred.
In accordance with the DGCL, Avant!'s Certificate of Incorporation
("Certificate") contains a provision to limit the personal liability of the
directors of the Registrant for violations of their fiduciary duty. This
provision eliminates each director's liability to the Registrant or its
stockholders for monetary damages except (i) for any breach of the director's
duty of loyalty to the Registrant or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the DGCL providing for liability of
directors for unlawful payment of dividends or unlawful stock purchases or
redemptions, or (iv) for any transaction from which a director derived an
improper personal benefit. The effect of this provision is to eliminate the
personal liability of directors for monetary damages for actions involving a
breach of their fiduciary duty of care, including any such actions involving
gross negligence.
Article IX of Avant!'s Certificate and Article VII, Section 6 of
Avant!'s Bylaws provide for indemnification of the officers and directors of the
Registrant to the fullest extent permitted by applicable law.
The Registrant has entered into indemnification agreements with each
director and executive officer which provide indemnification to such directors
and executive officers under certain circumstances for acts or omissions which
may not be covered by directors' and officers' liability insurance.
II-1
<PAGE>
Item 16. Exhibits.
(a) Exhibits
Exhibit
Number Description
- ------- -----------
2.1 Agreement and Plan of Reorganization dated as of August 18, 1996
among the Registrant, AGM Acquisition Corporation and Anagram, Inc.
(1)
2.2 Agreement and Plan of Reorganization dated as of August 22, 1996
among the Registrant, Natasha Merger Corporation and Meta-Software,
Inc. (1)
2.3 Agreement and Plan of Reorganization dated as of October 9, 1996
among the Registrant, DSM Acquisition Corporation and FrontLine
Design Automation, Inc. (2)
4.1 Amended and Restated Investors' Rights Agreement between the
Registrant and certain investors dated September 24, 1994. (3)
4.2* Registration Rights Agreement between the Registrant and certain
investors dated November 27, 1996.
4.3 Specimen certificate of the Registrant's Common Stock. (3)
5.1 Opinion of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP.
23.1 Consent of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP (included in Exhibit 5.1).
23.2 Consent of KPMG Peat Marwick LLP.
24.1 Power of Attorney. (See page II-4)
27.1 Financial Data Schedule (4)
* Previously filed.
(1) Incorporated by reference from the Registrant's Registration Statement
(File No. 333-11659) on Form S-4 as declared effective on September 30,
1996.
(2) Incorporated by reference from the Registrant's Current Report on Form 8-K
filed with the SEC on October 24, 1996.
(3) Incorporated by reference from the Registrant's Registration Statement
(File No. 33-91128) on Form S-1 as declared effective on June 6, 1995.
(4) Incorporated by reference from the Registrant's Current Report on Form 8-K
filed with the SEC on December 20, 1996.
(b) Financial Statement Schedules
Schedule II--Valuation and Qualifying Accounts
Schedules not listed above have been omitted because the information
required to be set forth herein is not applicable or is shown in the financial
statements or notes thereto.
II-2
<PAGE>
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement: (i) to include any
prospectus required by section 10(a)(3) of the Securities Act; (ii) to reflect
in the prospectus any facts or events arising after the effective date of the
Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement; and (iii) to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement; provided, however, that (i) and (ii)
do not apply if the Registration Statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by (i) and
(ii) is contained in periodic reports filed with or furnished to the Commission
by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to the Registration Statement No. 333-18445 to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Sunnyvale, State of
California on this 24th day of January, 1997.
AVANT! CORPORATION
By: /s/ Gerald C. Hsu
-----------------------------------------
Gerald C. Hsu
Chairman of the Board, President and
Chief Executive Officer
II-4
<PAGE>
<TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement No. 333-18445 has been signed by
the following persons in the capacities and on the dates indicated:
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Gerald C. Hsu Chairman of the Board, President and Chief January 24, 1997
- ---------------------------------------- Executive Officer (Principal Executive
Gerald C. Hsu Officer)
/s/ John P. Huyett* Chief Financial Officer and January 24, 1997
- ---------------------------------------- Treasurer (Principal Financial
John P. Huyett and Accounting Officer )
/s/ Eric Cho* Senior Vice President of Corporate January 24, 1997
- ---------------------------------------- Operations and Director
Y. Eric Cho
/s/ Shawn M. Hailey* Senior Vice President of Business
- ---------------------------------------- Development and Director January 24, 1997
Shawn M. Hailey
/s/ Eric A. Brill* Director and Secretary January 24, 1997
- ----------------------------------------
Eric A. Brill
/s/ Tench Coxe* Director January 24, 1997
- ----------------------------------------
Tench Coxe
/s/ Tatsuya Enomoto* Director January 24, 1997
- ----------------------------------------
Tatsuya Enomoto
*By: /s/ Gerald C. Hsu
----------------------------------
(Gerald C. Hsu, Attorney-in-fact)
</TABLE>
II-5
<PAGE>
Exhibit Index
Exhibit
Number Description
- ------- -----------
2.1 Agreement and Plan of Reorganization dated as of August 18, 1996
among the Registrant, AGM Acquisition Corporation and Anagram, Inc.
(1)
2.2 Agreement and Plan of Reorganization dated as of August 22, 1996
among the Registrant, Natasha Merger Corporation and Meta-Software,
Inc. (1)
2.3 Agreement and Plan of Reorganization dated as of October 9, 1996
among the Registrant, DSM Acquisition Corporation and FrontLine
Design Automation, Inc. (2)
4.1 Amended and Restated Investors' Rights Agreement between the
Registrant and certain investors dated September 24, 1994. (3)
4.2* Registration Rights Agreement between the Registrant and certain
investors dated November 27, 1996.
4.3 Specimen certificate of the Registrant's Common Stock. (3)
5.1 Opinion of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP.
23.1 Consent of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP (included in Exhibit 5.1).
23.2 Consent of KPMG Peat Marwick LLP.
24.1 Power of Attorney. (See page II-4)
27.1 Financial Data Schedule (4)
* Previously filed.
(1) Incorporated by reference from the Registrant's Registration Statement
(File No. 333-11659) on Form S-4 as declared effective on September 30,
1996.
(2) Incorporated by reference from the Registrant's Current Report on Form 8-K
filed with the SEC on October 24, 1996.
(3) Incorporated by reference from the Registrant's Registration Statement
(File No. 33-91128) on Form S-1 as declared effective on June 6, 1995.
(4) Incorporated by reference from the Registrant's Current Report on Form 8-K
filed with the SEC on December 20, 1996.
II-6
January 27, 1997
Avant! Corporation
1208 East Arques Avenue
Sunnyvale, California 94086
Re: Amendment No. 1 to the Registration Statement
on Form S-3
Ladies and Gentlemen:
We have examined the Amendment No. 1 to the Registration Statement on
Form S-3 to be filed by Avant! Corporation (the "Company") with the Securities
and Exchange Commission on January 27, 1997, as thereafter amended or
supplemented (the "Registration Statement"), in connection with the registration
under the Securities Act of 1933, as amended, of certain shares of the Company's
Common Stock (the "Shares") previously issued to the shareholders of FrontLine
Design Automation, Inc. ("FrontLine") and NexSyn Design Technology Inc.
("NexSyn") in connection with the merger of a wholly owned subsidiary of the
Company with and into FrontLine and the acquisition of all of the outstanding
Capital Stock of NexSyn, respectively. As your legal counsel, we have examined
the proceedings taken and are familiar with the proceedings proposed to be taken
by you in connection with the sale and issuance of the Shares.
It is our opinion that the Shares are legally and validly issued, fully
paid and non-assessable.
We consent to the use of this opinion as an exhibit to said
Registration Statement, and further consent to the use of our name wherever
appearing in said Registration Statement, including the prospectus constituting
a part thereof, and in any amendment or supplement thereto.
Very truly yours,
/s/ Gunderson Dettmer Stough
Villeneuve Franklin & Hachigian, LLP
------------------------------------
GUNDERSON DETTMER STOUGH
VILLENEUVE FRANKLIN & HACHIGIAN, LLP
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Avant! Corporation
We consent to incorporation by reference in Amendment No. 1 to the registration
statement on Form S-3 (No. 333-18445) dated January 27, 1997 of Avant!
Corporation of our report dated December 16, 1996, relating to the supplemental
consolidated balance sheets of Avant! Corporation and subsidiaries as of
December 31, 1994 and 1995 and the related supplemental consolidated statements
of income, shareholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1995, and the related supplemental
financial statement schedule, which report appears in the Form 8-K dated
December 20, 1996 of Avant! Corporation. We also consent to incorporation by
reference in Amendment No. 1 to the registration statement on Form S-3 (No.
333-18445) dated January 27, 1997 of Avant! Corporation of our report dated
December 16, 1996, relating to the consolidated balance sheets of Avant!
Corporation and subsidiaries as of December 31, 1994, and 1995, and the related
consolidated statements of income, shareholders' equity, and cash flows for each
of the years in the three-year period ended December 31, 1995, and the related
financial statement schedule, which report appears in the Form 8-K dated
December 20, 1996 of Avant! Corporation.
KPMG Peat Marwick LLP
San Jose, California
January 27, 1997