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Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
97
Other Acquisitions—
The Software segment also completed eight
other acquisitions: in the first quarter, Green Hat Software Limited
(Green Hat), Emptoris Inc. (Emptoris) and Worklight, Inc.
(Worklight), all privately held companies, and DemandTec, Inc.
(DemandTec), a publicly held company; in the second quarter,
Varicent Software Inc. (Varicent), Vivisimo Inc. (Vivisimo) and
Tealeaf Technology Inc. (Tealeaf), all privately held companies; and
in the third quarter, Butterfly Software, Ltd. (Butterfly), a privately
held company. STG completed two acquisitions: in the first quarter,
Platform Computing Corporation (Platform Computing), a privately
held company; and in the third quarter, Texas Memory Systems
(TMS), a privately held company. All acquisitions were for 100 per-
cent 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, 2012.
2012 Acquisitions
($ in millions)
Amortization
Life (in Years)
Kenexa
Other
Acquisitions
Current assets $ 133 $ 278
Fixed assets/noncurrent assets 98 217
Intangible assets
Goodwill N/A 1,014 1,880
Completed technology 3—7 169 403
Client relationships 4—7 179 194
In-process R&D N/A — 11
Patents/trademarks 1—7 39 37
Total assets acquired 1,632 3,020
Current liabilities (93) (143)
Noncurrent liabilities (188) (264)
Total liabilities assumed (281) (407)
Total purchase price $1,351 $2,613
N/A—Not applicable
Each acquisition further complemented and enhanced the compa-
ny’s portfolio of product and services offerings. Green Hat helps
customers improve the quality of software applications by enabling
developers to use cloud computing technologies to conduct testing
of a software application prior to its delivery. Emptoris expands the
company’s cloud-based analytics offerings that provide supply chain
intelligence leading to better inventory management and cost efficien-
cies. Worklight delivers mobile application management capabilities
to clients across a wide range of industries. The acquisition enhanced
the company’s comprehensive mobile portfolio, which is designed to
help global corporations leverage the proliferation of all mobile
devices—from laptops and smartphones to tablets. DemandTec
delivers cloud-based analytics software to help organizations improve
their price, promotion and product mix within the broad context of
enterprise commerce. Varicent’s software automates and analyzes
data across sales, finance, human resources and IT departments to
uncover trends and optimize sales performance and operations. Vivi-
simo software automates the discovery of big data, regardless of its
format or where it resides, providing decision makers with a view of
key business information necessary to drive new initiatives. Tealeaf
provides a full suite of customer experience management software,
which analyzes interactions on websites and mobile devices. Butterfly
offers storage planning software and storage migration tools, helping
companies save storage space, operational time, IT budget and
power consumption. Platform Computing’s focused technical and
distributed computing management software helps clients create,
integrate and manage shared computing environments that are used
in compute-and-data intensive applications such as simulations,
computer modeling and analytics. TMS designs and sells high-
performance solid state storage solutions.
For the “Other Acquisitions,” the overall weighted-average life of
the identified amortizable intangible assets acquired is 6.6 years.
These identified intangible assets will be amortized on a straight-line
basis over their useful lives. Goodwill of $1,880 million was assigned
to the Software ($1,412 million), Global Business Services (GBS)
($5 million), GTS ($21 million) and STG ($443 million) segments.
As of the acquisition dates, it was expected that approximately
15 percent of the goodwill would be deductible for tax purposes.