Mentor Hires Goldman's Woodruff to Fend Off Cadence

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Includes: CDNS, MENT
by: The Deal Economy

Mentor Graphics Corp. (NASDAQ:MENT) confirmed Monday that it had hired Goldman, Sachs & Co. (as we reported last week) as well as Merrill Lynch & Co. to help the chip design software maker fight off an unsolicited $1.6 billion takeover bid from rival Cadence Design Systems Inc. (NASDAQ:CDNS).

Our sources tell us that Mentor has tapped Jon Woodruff, co-head of global technology M&A at Goldman, and Steve Baronoff, who runs M&A at Merrill. Recently, Goldman has gotten a workout helping defend targets from hostile bidders.

Cadence on June 17 unveiled its bid for Mentor, which quickly turned down the offer, citing antitrust concerns and a price it said was too low. Cadence hired Deutsche Bank Securities' Tor Braham, Richard Hart and David Locala to advise it on the bid.

Woodruff, along with Gene Sykes, co-chairman of Goldman M&A, is well-versed in hostile defenses as well as tech deals, having helped Yahoo! Inc. (YHOO) resist a $47.5 billion bid from Microsoft Corp. (NASDAQ:MSFT). Goldman is also advising Circuit City Stores Inc. (NYSE:CC) in its fight to evade a $1.4 billion takeover effort by Blockbuster Inc. (BBI).

Woodruff, who joined Goldman in 1993, counseled contract manufacturer Solectron Corp. last year in its $3.6 billion sale to rival Flextronics International Ltd. (NASDAQ:FLEX). In 2006, he worked with Mercury Interactive Corp. in Hewlett-Packard Co.'s (NYSE:HPQ) $4.5 billion purchase of the software testing company, which dragged on for months; the same year, he was recruited by Walt Disney Co. (NYSE:DIS) in its $7.4 billion purchase of Pixar Animation Studios Inc. In 2005 he counseled Siebel Systems Inc. in its contentious $5.8 billion acquisition by Oracle Corp. (NYSE:ORCL).

Baronoff has been involved in several major deals, including Merrill's mandate to advise Navteq Corp. in late 2007, when the digital map navigation company was acquired by Nokia Corp. (NYSE:NOK) for $8.1 million. Baronoff, a consumer specialist, also advised Procter & Gamble Co. (NYSE:PG) in its $57 billion buy of Gillette Co. in 2005.

But his general focus on consumer companies like Procter & Gamble led some bankers to wonder about his addition to the Mentor team.

"We certainly haven't come across Baronoff on a tech deal," one person said.

The loser in the Cadence-Mentor battle appears to be Frank Quattrone. The former star investment banker from Credit Suisse Group returned to dealmaking earlier this year when he formed the Qatalyst Group, a merchant bank focused on the tech industry. Quattrone attended a Mentor stockholder meeting on June 19 and was vying for the role of Mentor's advisor, sources said. Quattrone is known for beating obstruction of justice and witness tampering charges in 2006 as part of a government investigation into CSFB's IPO practices.