Dell 2007 Annual Report Download - page 85

Table of Contents
DELL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Other Acquisitions in Fiscal 2008
Dell acquired three other companies in Fiscal 2008, Everdream Corporation, Silverback Technologies Inc., and Zing Systems Inc. Dell
also purchased CIT Group Inc.'s remaining 30% interest in DFS during Fiscal 2008. Total consideration for these purchases was
approximately $553 million, which included direct transaction costs, and certain liabilities recorded in connection with these acquisitions.
The largest of these transactions was the purchase of CIT's 30% minority interest in DFS for approximately $306 million, which resulted
in recognition of $245 million of goodwill and now gives Dell 100% ownership in DFS. With these acquisitions Dell expects to be able
to broaden its services and financing offerings to customers while simplifying IT.
Dell recorded approximately $438 million of goodwill and $78 million of amortizable intangible assets in connection with these other
acquisitions. Dell also expensed approximately $8 million of IPR&D related to these acquisitions in Fiscal 2008. Based on valuations
prepared using estimates and assumptions developed by management, the preliminary purchase price allocations as of the date of
acquisitions are as follows:
(in millions)
Cash and short-term investments $ 9
Other tangible assets 7
Liabilities (14)
Total net assets acquired 2
Amortizable intangible assets 78
Indefinite lived intangible assets(a) 27
Total purchased intangibles 105
Goodwill 438
IPR&D 8
Total purchase price $ 553
(a) Indefinite-lived intangible assets represent tradename related to DFS, which is valued at approximately $27 million at February 1, 2008.
Goodwill, which represents the excess of the purchase price over the net tangible and intangible assets acquired, is not deductible for tax
purposes for most of these acquisitions. The amortizable intangible assets are being amortized over their estimated useful lives as follows:
Weighted-Average
Useful Life
(in millions) (years)
Technology $ 42 3.8
Customer relationships 30 5.0
Covenants not-to-compete 5 3.4
Other 1 3.4
Total amortizable intangible assets $ 78 4.2
Dell has included the results of operations of these transactions prospectively from the respective date of the transaction.
Acquisitions in Fiscal 2007
Dell completed two acquisitions during Fiscal 2007. Total consideration for these acquisitions was approximately $146 million, which
included direct transaction costs. The purchase of Alienware Corporation, the larger of the two
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