IBM 2011 Annual Report Download - page 91

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Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies 89
Note C.
Acquisitions/Divestitures
Acquisitions
2011
In 2011, the company completed five acquisitions of privately held
companies at an aggregate cost of $1,849 million.
These acquisitions were completed as follows: in the second
quarter, TRIRIGA, Inc. (TRIRIGA); and in the fourth quarter, i2,
Algorithmics, Inc. (Algorithmics), Q1 Labs and Curam Software Ltd.
(Curam Software). TRIRIGA was integrated into the Software
and Global Business Services (GBS) segments upon acquisition.
All other acquisitions were integrated into the Software segment
upon acquisition. All acquisitions reflected 100 percent ownership
of the acquired companies.
The table below reflects the purchase price related to these acquisitions and the resulting purchase price allocations as of December 31, 2011.
2011 Acquisitions
($ in millions)
Amortization
Life (in Years)
Tot a l
Acquisitions
Current assets $ 251
Fixed assets/noncurrent assets 88
Intangible assets
Goodwill N/A 1,291
Completed technology 7 320
Client relationships 7 222
Patents/trademarks 1 to 7 17
Total assets acquired 2,190
Current liabilities (191)
Noncurrent liabilities (150)
Total liabilities assumed (341)
Total purchase price $1,849
N/A—Not applicable
TRIRIGA is a provider of facility and real estate management software
solutions, which help clients make strategic decisions regarding
space usage, evaluate alternative real estate initiatives, generate
higher returns from capital projects and assess environmental impact
investments. The acquisition adds advanced real estate intelligence
to the company’s smarter buildings initiative. i2 expands the company’s
big data analytics software for smarter cities by helping both public
and private entities in government, law enforcement, retail, insurance
and other industries access and analyze information they need to
address crime, fraud and security threats. Algorithmics provides
software and services for improved business insights at financial
and insurance institutions to assess risk and address regulatory
challenges. Q1 Labs is a provider of security intelligence software
and will accelerate efforts to help clients more intelligently secure
their enterprises by applying analytics to correlate information from
key security domains and creating security dashboards for their
organizations. Curam Software is a provider of software and services
which help governments improve the efficiency, effectiveness and
accessibility of social programs for smarter cities.
Purchase price consideration for all acquisitions as reflected in
the table above, is paid primarily in cash. All acquisitions are reported
in the Consolidated Statement of Cash Flows net of acquired cash
and cash equivalents. The overall weighted-average life of the
indentified intangible assets acquired is 6.9 years. These identified
intangible assets will be amortized on a straight-line basis over
their useful lives. Goodwill of $1,291 million has been assigned to
the Software ($1,277 million) and GBS ($14 million) segments. It is
expected that approximately 25 percent of the goodwill will be
deductible for tax purposes.