AUSTIN, TX - Test tool provider National Instruments has acquired Toronto-based EDA company Electronics Workbench. Financial details were not disclosed.

The deal is expected to close in the March quarter.

The companies have worked together for years, and National Instruments said the acquisition would strengthen the integration between functional test and design tools and advance graphical system design technology.

National Instruments said it would retain all of Electronics Workbench's approximately 50 worldwide employees, and the EDA firm may hire additional personnel after budgeting talks concluded.

"Our customers are not satisfied with the integration of design, simulation and test tools in the industry today," said Ray Almgren, National Instruments' vice president of product marketing and academic relations. "A graphical system design platform that integrates these disparate tools will increase productivity and make testing throughout the design process more seamless. Our acquisition of Electronics Workbench is a major step forward in making this vision a reality and satisfying the needs of the design engineering community in industry and academia."

The companies have collaborated for several years to integrate their tools. The Electronics Workbench acquisition adds graphical design and simulation software to National Instruments' platform of graphical development tools.

Almgren said National wasn't acquiring Electronics Workbench in order to become a pure-play EDA company like Mentor Graphics or Cadence. "I think that goes back to the frame of reference the industry has: You're either an EDA company or a test company. We're going to become a system design tool company. We're going to innovate on a vector that these guys simply aren't interested in working on," Almgren said. "Our customers tend to be in functional test. The integration between design and test is not very good. In the short term, we can make a lot of improvements."

Bill Wignall, president of Electronics Workbench, explained, "The reality is that Cadence and Mentor are all about IC design. The place where design and test are already integrated is in the IC world. There's no wish from this acquisition to take on those guys. We want to do for system design what's already been done for IC design."

National Instruments will retain all Electronics Workbench employees and continue to operate the company as a separate entity in Toronto. Development teams will work to further integrate the products and knowledge of the two companies.

As a wholly owned subsidiary of National Instruments, Electronics Workbench plans to continue to develop and offer its complete line of design automation software and directly support educational initiatives with uninterrupted support to participating schools.

The acquisition is not expected to have a material impact on National Instruments' earnings for the first quarter of 2005.