August 24, 2009 (FinancialWire) — Magma(r) Design Automation, Inc. (NASDAQ: LAVA) announced its intent to amend the terms of its exchange offer to holders of its outstanding 2.0% convertible senior notes due May 15, 2010 (the “existing notes).

Magma expects that the amended terms will provide that holders of existing notes will receive $1,000 of 6.0% convertible senior notes due 2014 (the “exchange notes) for each $1,000 principal amount of existing notes, and that the conversion price for the exchange notes will be equal to the greater of (1) $1.80 per share and (2) 120 percent of the average of the volume weighted average price of Magma’s common stock for the five-trading-day period ending on Sept. 2, 2009 (the “5 Day VWAP). Magma also announced its intention to decrease the interest rate on the exchange notes from 8.0 percent to 6.0 percent.

As a result of these modifications to the terms of the exchange offer, the new expiration date for the exchange offer will be midnight EDT on Friday, Sept. 4, 2009, unless the exchange offer is further extended. Magma plans to file an amendment to its Registration Statement on S-4 and its Schedule TO for the exchange offer on Aug. 24, 2009 to reflect the new proposed terms for the exchange offer.

The 5 Day VWAP currently provided for in the Registration Statement, which was determined over the 5-day period ended on Aug. 20, 2009, equaled $1.49 per share. Since 120 percent of the 5 Day VWAP ending Aug. 20, 2009 is less than $2.55 per share, the conversion price for the exchange notes prior to the planned amendment discussed above would have been equal to $2.55 per share. As a result of the planned amendment, the $2.55 per share price will no longer be applicable to the establishment of the conversion price of the exchange notes.

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