Mentor Graphics Acquires FirstEarth for ECAD Analysis Capabilities.

Business Editors/High-Tech Writers

WILSONVILLE, Ore.--(BUSINESS WIRE)--Oct. 8, 2003

Mentor Graphics Corporation (Nasdaq:MENT) today announced it has acquired FirstEarth, a United Kingdom-based software company specializing in the supply of analysis software for design of electrical wiring systems used in automotive, rail and aerospace markets. FirstEarth products are already integrated with Mentor's broadly adopted Logical Cable schematic authoring tool and will be available through Mentor's direct channel immediately. Terms of the deal were not disclosed.

FirstEarth products will also be integrated with Mentor Graphics(R) market-leading Capital Harness Systems(TM) (CHS) tool flow to offer unparalleled coverage in the design and analysis of electrical wiring systems.

FirstEarth was established in 1997 to develop and market software to automate Failure Mode and Effects Analysis (FMEA) and Sneak Circuit Analysis (SCA) for electrical systems. The acquisition will further expand Mentor's wiring-systems design package to embrace the developing design analysis market. System designers face the challenges of increasing design complexity in systems, with the need to shorten time-to-market, reduce the number of physical prototypes, and maintain and improve the quality, safety and reliability of their products. The only way this can be achieved is through the use of a wide range of automated analysis tools. Mentor Graphics has already broadened the company's electrical wiring systems solution through the CHS product suite, and this year launched the ECAD design solution Capital(R) Logic(TM), further extending the suite's capabilities in line with other CHS components such as the Capital Manufacture(TM) and the Capital Factory(TM) product families.

"Specialized analysis tools have always been an integral part of our CHS roadmap and with the Capital Logic product family now launched the timing is perfect to add FirstEarth's unique product offering to CHS," said Martin O'Brien, general manager, harness systems business unit, Mentor Graphics. "We have maintained a close watch on reaction to FirstEarth products within our customer base and believe they have a great future with us," he added.

"We are all very positive about the prospect of our products becoming part of Mentor's offering," said Nigel Hughes, managing director of FirstEarth. "The products, including major FMEA (Failure Mode Effects Analysis) and Sneak Circuit modules are a natural fit to Mentor's tool flow and have an architecture extremely compatible with CHS."

Hughes added, "FirstEarth has been working closely with Mentor for some time now and this coupling of the product lines can only strengthen both offerings. FirstEarth's products are immediately applicable to current users of Logical Cable and soon to users of the newly launched Capital Logic authoring tool."

About Capital Harness Systems

The Capital Manufacture and Capital Factory product families are software components within the Mentor Graphics end-to-end Capital Harness Systems (CHS) flow tools. CHS is a complete, end-to-end toolset for complex wire harness creation, with software tools to automate design through manufacture. The Capital Manager(TM) solution at the heart of CHS stores and manages all data flows throughout the entire design to manufacturing process. All CHS applications write to and access data directly from this common repository.

About Mentor Graphics

Mentor Graphics Corporation (Nasdaq:MENT) is a world leader in electronic hardware and software design solutions, providing products, consulting services and award-winning support for the world's most successful electronics and semiconductor companies. Established in 1981, the company reported revenues over the last 12 months of about $650 million and employs approximately 3,500 people worldwide. Corporate headquarters are located at 8005 S.W. Boeckman Road, Wilsonville, Oregon 97070-7777; Silicon Valley headquarters are located at 1001 Ridder Park Drive, San Jose, California 95131-2314. World Wide Web site: www.mentor.com.

Mentor Graphics is a registered trademark and Capital Harness Systems, Capital Manufacture, Capital Factory, Capital Manager and Capital Logic are trademarks of Mentor Graphics. All other company or product names are the registered trademarks or trademarks of their respective owners.