Avid 2015 Annual Report Download - page 79

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73
becomes effective for the Company on January 1, 2019, and early adoption is permitted upon issuance. The Company is evaluating
the potential impact of adopting this standard on its financial statements.
C. ACQUISITION
On June 23, 2015, the Company completed the acquisition of Orad Hi-Tech Systems Ltd. (“Orad”), an Israeli company previously
listed on the Frankfurt Stock Exchange. Each issued and outstanding share of Orad common stock was canceled and converted
into the right to receive consideration equal to €5.67 in cash, representing total consideration paid of $66.0 million based on the
exchange rate on the date of closing, net of estimated cash acquired. As a result of the acquisition, the Company incurred merger
and integration cost of $5.7 million, which was recorded as general and administrative expenses in the Company’s statement of
operations. Orad provides 3D real-time graphics, video servers and related asset management solutions. The acquisition adds
applications to Avid’s Studio Suite which the Company intends to connect to the Avid MediaCentral Platform.
The following table summarizes the purchase price allocation to the fair value of the assets acquired and liabilities assumed at the
date of acquisition (in thousands).
Cash $ 7,477
Accounts receivable, net 6,625
Inventories 3,128
Other current assets 1,217
Property and equipment 1,338
Identifiable intangible assets 37,200
Other assets 3,187
Goodwill 32,643
Total assets acquired 92,815
Accounts payable (1,395)
Accrued expenses and other current liabilities (7,769)
Deferred revenue and deposits (2,714)
Deferred tax liabilities, net (3,554)
Other long-term liabilities (3,939)
Total liabilities assumed (19,371)
Net assets acquired $ 73,444
The purchase price allocation resulted in goodwill of $32.6 million, which is not deductible for tax purposes. The goodwill is
attributable to expected synergies from combining the operations of Orad with the Company and intangible assets that do not
qualify for separate recognition, such as an assembled workforce. The following table presents the identifiable intangible assets
acquired and their respective weighted average useful lives (dollars in thousands):
Weighted
Average
Life
(Years) Amount
Core and completed technology 4 $ 31,200
Customer relationships 4 5,800
Trade name 1 200
Total $ 37,200
The estimated fair value of intangible assets was determined using the excess earnings method for technology, replacement cost
method for customer relationships and relief from royalty method for trade name.