IBM 2012 Annual Report Download - page 90

Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
89
On February 1, 2013, the company announced that it had entered
into a definitive agreement to acquire the software portfolio of Star
Analytics Inc., a privately held business analytics company based in
Redwood City, California. The combination of the company’s and Star
Analytics software will advance the company’s business analytics
initiatives. The acquisition is subject to customary closing conditions
and is expected to be completed in the first quarter of 2013.
On February 7, 2013, the company completed the acquisition of
StoredIQ Inc. (StoredIQ), a privately held company based in Austin,
Texas. StoredIQ will advance the company’s efforts to help clients
derive value from big data and respond more efficiently to litigation
and regulations, dispose of information that has outlived its purpose
and lower data storage costs. At the date of issuance of the financial
statements, the initial purchase accounting was not complete for
this acquisition.
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, Algo-
rithmics, Inc. (Algorithmics), Q1 Labs and Curam Software Ltd.
(Curam Software). TRIRIGA was integrated into the Software
and GBS segments upon acquisition. All other acquisitions were
integrated into the Software segment upon acquisition. All acquisi-
tions reflected 100 percent ownership of the acquired companies.
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 environ-
mental impact investments. The acquisition added advanced real
estate intelligence to the company’s smarter buildings initiative. i2
expanded 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 ana-
lyze 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 accelerates 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.
The overall weighted-average life of the indentified intangible
assets acquired was 6.9 years. These identified intangible assets
will be amortized on a straight-line basis over their useful lives.
Goodwill of $1,291 million was assigned to the Software ($1,277
million) and GBS ($14 million) segments. As of the acquisition dates,
it was expected that approximately 25 percent of the goodwill would
be deductible for tax purposes.
The table below reflects the purchase price related to these
acquisitions and the resulting purchase price allocations as of
December 31, 2011.
2011 Acquisitions
($ in millions)
Amortization
Life (in Years)
Tota 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