Cisco 2014 Annual Report Download - page 94

Acquisition of NDS Group Limited
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
Other Fiscal 2013 Business Combinations
The Company acquired privately held Meraki, Inc. (“Meraki”) in the second quarter of fiscal 2013. Prior to its acquisition,
Meraki offered 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. Prior to its acquisition,
Intucell provided 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.
The Company acquired privately held Ubiquisys Limited (“Ubiquisys”) in the fourth quarter of fiscal 2013. Prior to its
acquisition, Ubiquisys offered service providers intelligent 3G and long-term evolution (LTE) small-cell technologies for
seamless connectivity across mobile networks. With its acquisition of Ubiquisys, the Company intends to strengthen its
commitment to global service providers by enabling a comprehensive small-cell solution that supports the transition to next-
generation radio access networks. The Company has included revenue from the Ubiquisys acquisition, subsequent to the
acquisition date, in its NGN Routing product category.
The total purchase consideration related to the Company’s business combinations completed during fiscal 2013 consisted of
cash consideration, repayment of debt, and vested share-based awards assumed. The total cash and cash equivalents acquired
from these business combinations was approximately $156 million.
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