ARM chairman Robin Saxby said in a conference call: "This will be a combination of the two leading silicon IP (intellectual property), cash-generating and profitable companies."
He added that the companies are complementary, with almost no overlap of customers or products. Artisan designs at the physical level and sells its designs to chip foundries. designs chips and provides some of the software to go with them.
Both companies emphasize the strength of their intellectual property; royalties from intellectual property give both companies operating profit margins of over 20 percent.
ARM Chief Executive Warren East said: "As system design complexity increases in deeper sub-micron technologies, so does the need for stronger links between all aspects of ( ) development, from library elements to advanced microprocessor IP and software."
ARM will pay $225 million in cash out of its reserves and toss in ARM shares to make up the full price. Artisan shareholders can take a choice of cash or shares. Artisan Chairman Lucio Lanza and President and CEO Mark Templeton will join the ARM board, while East will be CEO of the combined companies.
For its money, ARM will be getting 340 employees and design centers in California and Bangalore, India. Artisan made a profit of $17.3 million on revenue of $82.9 million in the 12-month period ending June 30 and has net assets of $205 million, $140 million of this in cash.
East said that his aim was to have ARM technology in every digital device. The two companies have both made their reputations by elegant designs that give energy-efficient computing power at low cost.
In the 12 months that ended June 30, ARM made $51.3 million profit on $235 million revenue.
Ron Coates of Silicon.com reported from London.