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3. Business Combinations
(a) Acquisition Summary
On July 30, 2012, the Company completed its acquisition of NDS Group Limited (“NDS”), a provider of video software and
content security solutions that enable service providers and media companies to securely deliver and monetize new video
entertainment experiences. The acquisition of NDS will be combined with the delivery of Cisco Videoscape, the Company’s
comprehensive content delivery platform that enables service providers and media companies to deliver next-generation
entertainment experiences. The Company has included revenue from the NDS acquisition, subsequent to the acquisition date,
in its Service Provider Video product category.
Under the terms of the acquisition agreement, the Company paid total cash consideration of approximately $5.0 billion, which
included the repayment of $993 million of pre-existing NDS debt to third party creditors at the closing of the acquisition. The
following table summarizes the purchase consideration for the NDS acquisition (in millions):
Fair Value
Cash consideration to seller ....................................................................... $4,012
Repayment of NDS debt to third party creditors ...................................................... 993
Total purchase consideration ...................................................................... $5,005
The payment of the total purchase consideration of approximately $5.0 billion shown above, net of cash and cash equivalents
acquired, is classified as a use of cash under investing activities in the Consolidated Statements of Cash Flows.
The total purchase allocation for NDS is summarized as follows (in millions):
Fair Value
Cash and cash equivalents ........................................................................ $ 98
Accounts receivable, net ......................................................................... 199
Other tangible assets ............................................................................ 268
Goodwill ..................................................................................... 3,444
Purchased intangible assets ....................................................................... 1,746
Deferred tax liabilities, net ....................................................................... (378)
Liabilities assumed ............................................................................. (372)
Total purchase consideration ...................................................................... $5,005
The Company completed 12 additional business combinations during fiscal 2013. A summary of the allocation of the total
purchase consideration is presented as follows (in millions):
Fiscal 2013
Purchase
Consideration
Net
Liabilities
Assumed
Purchased
Intangible
Assets Goodwill
Meraki, Inc. ....................................................... $ 974 $ (59) $289 $ 744
Intucell, Ltd. ...................................................... 360 (23) 106 277
Ubiquisys Limited .................................................. 280 (30) 123 187
All others (nine in total) ............................................. 363 (25) 127 261
Total other acquisitions ......................................... $1,977 $(137) $645 $1,469
The Company acquired privately held Meraki, Inc. (“Meraki”) in the second quarter of fiscal 2013. Meraki offers mid-market
customers on-premise networking solutions centrally managed from the cloud. With its acquisition of Meraki, the Company
intends to address the shift to cloud networking as a key part of the Company’s overall strategy to accelerate the adoption of
software-based business models that provide new consumption options for customers and revenue opportunities for partners.
The Company has included revenue from the Meraki acquisition, subsequent to the acquisition date, in its Wireless product
category.
The Company acquired privately held Intucell, Ltd. (“Intucell”) in the third quarter of fiscal 2013. Intucell provides advanced
self-optimizing network software for mobile carriers. With its acquisition of Intucell, the Company intends to enhance its
commitment to global service providers by adding a critical network intelligence layer to manage and optimize spectrum,
coverage and capacity, and ultimately the quality of the mobile experience. The Company has included revenue from the
Intucell acquisition, subsequent to the acquisition date, in its NGN Routing product category.
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