Virage Logic has moved to acquire ARC International, the UK-based semiconductor and processor IP firm in a cash deal valued at £25.2m ($41m).
The directors of ARC have recommended 
unanimously that shareholders accept the offer.
St Albans-based ARC has been hit in the first half of the year by the downturn in the semiconductor market.
This came after the IP firm announced a business reorganisation late in 2008 which divided the company into software and system-on-chip business units.
ARC, which develops processor technology in the UK and US, has also
development to India and Russia" href="http://www.electronicsweekly.com/Articles/2008/09/22/44565/arc-moves-some-processor-development-to-india-and-russia.htm">transfered some product development to engineering centres in Russia and India.
See also: Arc says chip IP going into implantable medical devices
"The company has been rationalised and strengthened under its new leadership, and with its market-leading technology and outstanding worldwide customer base, ARC is well positioned for a successful future,” said Richard Barfield, chairman of ARC.
"The acquisition of ARC would represent another significant milestone in the execution of our vision of establishing Virage Logic as a broad-line supplier of highly differentiated semiconductor IP to our global IDM, foundry and fabless customers,” said Dan McCranie, Virage Logic’s executive chairman.
“With approximately $24 million in revenue for the trailing twelve months ended June 30, 2009 and over 150 customers, ARC would contribute meaningful scale to our business. Furthermore, ARC would significantly expand our market opportunity to include microprocessor cores, the largest segment of the semiconductor IP market.”
The move has been prompted by the need to apply processor IP in the system-on-chip (SoC) devices which Virage Logic designs.
"In our engagements with well over 300 existing worldwide customers, we have seen the need to provide additional IP building blocks to enable successful and timely development large SoC products," said Dr. Alex Shubat, president and CEO of Virage Logic.
The US company has its own IP for memory compilers, logic libraries, non-volatile memory and test functions.