Adaptec 2006 Annual Report Download - page 83
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Table of Contents
(in thousands)
PMC shares $ 224,411
Vested Passave stock options assumed by PMC 30,135
Merger costs 2,950
Total preliminary purchase price $ 257,496
The total purchase price has been allocated on a preliminary basis to the fair value of assets acquired and liabilities assumed, and the excess of the purchase price
over the net assets acquired was recorded as goodwill, which for this acquisition is not deductible for tax purposes. The preliminary allocation was determined by
management based on a third-party valuation. Areas of the purchase price that are not yet finalized and may result in future amounts payable by PMC relate to
settlement of a legal matter, and the residual goodwill. Merger costs include investment banking fees, legal and accounting fees and other external costs directly
related to the merger.
Net assets acquired consist of the following:
(in thousands)
Tangible assets, net of liabilities $ 10,512
Intangible assets 82,500
In-process research and development 20,500
Goodwill 143,984
Net assets acquired $ 257,496
Intangible assets acquired, and their respective estimated remaining useful lives, over which each asset will be amortized on a straight-line basis, are:
(in thousands)
Estimated
fair value
Estimated
average remaining
useful life
Existing technology $ 46,000 4 years
Core technology 15,400 4 years
Customer relationships 20,300 4 years
Backlog 800 eight months
In-process research and development 20,500 N/A
Total intangible assets $ 103,000
The amount allocated to in-process research and development (IPR&D) represents an estimate of the fair value of research projects that have not reached
technological feasibility and have no alternative future use. The estimated fair value of IPR&D was expensed immediately following the consummation of the
acquisition.
81
Source: PMC SIERRA INC, 10-K, March 01, 2007 Powered by Morningstar® Document Research℠