Ingram Micro 2008 Annual Report Download - page 47

EMEA and in Asia-Pacific. These entities were acquired for an aggregate cash price of $12.3 million, including
related acquisition costs, plus an estimated earn-out of $0.9 million to be paid in 2009, which has been preliminarily
allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction date,
including intangible assets of $7.6 million, primarily related to vendor and customer relationships with estimated
useful lives of 10 years. The resulting goodwill recorded was $3.6 million and $1.6 million in EMEA and Asia-
Pacific, respectively.
In December 2007, we closed the sale of our Asian semiconductor business for a cash price of $18.2 million.
As a result, we recorded a pre-tax gain of $2.9 million, which is reported as a reduction to SG&A expenses in our
consolidated statement of income. We allocated $5.8 million of Asia-Pacific reporting unit goodwill as part of the
disposition of the semiconductor business and in the determination of the associated gain on sale.
In June 2007, we acquired certain assets and liabilities of DBL. DBL was acquired for $102.2 million, which
included an initial cash price of $96.5 million, including related acquisition costs, plus an estimated working capital
adjustment of $5.7 million, which is subject to a final true-up to be agreed to by the two parties. The purchase price
was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction
date, resulting in goodwill of $59.7 million, trade names of $11.6 million with estimated useful lives of 20 years and
other intangible assets of $12.8 million primarily related to customer relationships and non-compete agreements
with estimated useful lives of up to eight years. In the first half of 2008, we made adjustments to the purchase price
allocation above, primarily resulting from an increase in the balance of certain preacquisition liabilities, by
$6.9 million. These adjustments yielded an increase of goodwill for the same amount.
In March 2007, we acquired all the outstanding shares of VPN Dynamics and a minority interest of 49% in a
related company, Securematics. Our interests in these related entities were acquired for an initial aggregate
purchase price of $26.8 million, including contingent consideration for the achievement of a milestone plus related
acquisition costs. We have a call option and the sellers have a put option for the remaining 51% interest held by the
shareholders of Securematics at a purchase price of $1.0 million, which both parties have agreed will be executed in
March 2012. The option price of $1.0 million has been recorded in accrued expenses in our consolidated balance
sheet at January 3, 2009 and December 29, 2007. The results of Securematics have been consolidated in accordance
with Financial Accounting Standards Board Interpretation No. 46 “Consolidation of Variable Interest Entities.” The
purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the
transaction date, resulting in goodwill of $20.7 million, trade names of $3.8 million with estimated useful lives of
20 years, other intangible assets of $4.0 million, primarily related to customer relationships and non-compete
agreements with estimated useful lives of up to five years, and a deferred tax liability of $3.2 million related to the
intangible assets, none of which are deductible for tax purposes. In 2008, we made an adjustment to the purchase
price allocation associated with these acquisitions to reflect a reduction in tax-related liabilities at the date of
purchase totaling $0.1 million and a decrease of goodwill for the same amount.
In June 2006, we acquired the assets of SymTech, a leading Nordic distributor of AIDC/POS technologies to
solution providers and system integrators. The purchase price for this acquisition consisted of a cash payment of
$3.6 million, resulting in the recording of $0.9 million of goodwill and $0.2 million of amortizable intangible assets
primarily related to customer relationships and non-compete agreements.
Capital Resources
We have maintained a conservative capital structure which we believe will serve us well in the current
economic environment. We have a range of corporate finance facilities which are diversified by type, maturity and
geographic region with various financial institutions worldwide. These facilities have staggered maturities through
2012. Our cash and cash equivalents are deposited and/or invested with various financial institutions that we
endeavor to monitor regularly for credit quality. We believe that our existing sources of liquidity, including cash
resources and cash provided by operating activities, supplemented as necessary with funds available under our
credit arrangements, will provide sufficient resources to meet our present and future working capital and cash
requirements for at least the next twelve months. However, the capital and credit markets have been experiencing
unprecedented levels of volatility and disruption. Such market conditions may limit our ability to replace, in a
timely manner, maturing credit facilities or affect our ability to access committed capacities or the capital we
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