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Notes to Consolidated Financial Statements
79international business machines corporation and Subsidiary Companies
balance to the Global Services segment. The goodwill is not
deductible for tax purposes. The overall weighted-average
life of the intangible assets purchased is approximately three
years. The results of operations of the acquired businesses
were included in the company’s Consolidated Financial
Statements from the respective dates of acquisition.
2001
In 2001, the company completed two acquisitions at a cost of
approximately $1,082 million.
The larger acquisition was Informix Corporation’s
(Informix) database software business. The company paid
approximately $1 billion in cash for the net assets of the busi-
ness. Under the terms of the acquisition, the company paid
$889 million of the purchase price in 2001. The balance was
paid in January 2003. The Informix acquisition provided the
company with a database software system for data warehous-
ing, business intelligence and transaction-handling systems
that are used by more than 100,000 customers. In addition,
the acquisition significantly increased the size of the com-
pany’s UNIX database business. The company purchased
Informix in the third quarter of 2001.
The following table presents the allocation of purchase
price related to the 2001 acquisitions as of the respective
dates of acquisition.
amortization
(dollars in millions) life (in years)informix other
Current assets $««««156 $«««57
Fixed/non-current assets 41 21
Intangible assets:
Goodwill «591 «««25
Customer lists 5220 «—
Completed technology 3140 «—
Trademarks 210«—
Total assets acquired «1,158 «103
Deferred revenue (101) «(2)
Payables/accrued expenses (55) (21)
Total liabilities assumed «««(156) ««(23)
Total purchase price $«1,002 $«««80
Informix
The primary items that generated goodwill are the value of
the acquired assembled workforce and the synergies between
Informix and the company created by the combination.
Goodwill of $591 million has been assigned to the Software
segment. Almost all of the goodwill is deductible for tax
purposes. This transaction occurred after June 30, 2001, and
therefore, the acquired goodwill is not subject to amortization.
The overall weighted-average life of intangible assets pur-
chased from Informix is 4.2 years. The results of operations
of Informix were included in the company’s Consolidated
Financial Statements as of July 2, 2001.
Other Acquisitions
The primary items that generated goodwill are the synergies
between the acquired business and the company and the pre-
mium paid by the company for the right to control the business
acquired. Goodwill of $25 million has been assigned to the
Global Services segment. The goodwill is not deductible for
tax purposes. The results of operations of the acquired busi-
ness were included in the company’s Consolidated Financial
Statements from the date of acquisition.
2000
In 2000, the company completed nine acquisitions at a cost of
approximately $511 million.
The largest acquisition was LGS Group Inc. (LGS). The
company acquired all the outstanding stock of LGS in April
2000 for $190 million. LGS offers services ranging from appli-
cation development to information technology (IT) consulting.
The results of operations of LGS were included in the com-
pany’s Consolidated Financial Statements as of April 2000.
The table below presents the allocation of the purchase
price related to the 2000 acquisitions as of the respective dates
of acquisition.
(dollars in millions) lgs other
Tangible net assets $«««31 $«««68
Goodwill «159 «««220
Other identifiable intangible assets —36
In-process research and development —9
Deferred tax liabilities related to
identifiable intangible assets «— «««(12)
Total purchase price $«190 $«321