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Table of Contents
VMware, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Fiscal Year 2010
Business Acquisitions
In the year ended December 31, 2010, VMware acquired six companies, which were not material to VMware’s consolidated financial
statements, either individually or in the aggregate. The aggregate consideration for these acquisitions was $293.0 million, net of cash acquired.
The following table summarizes the allocation of the consideration paid to the fair value of the tangible and intangible assets acquired and
liabilities assumed (table in thousands):
Transfer of Net Assets Under Common Control
In April 2010, VMware acquired certain software product technology and expertise from EMC’s Ionix information technology (“IT”)
management business for cash consideration of $175.0 million. The acquired software product technology and expertise complement VMware’s
existing development efforts and expand its vCenter product family. EMC retained the Ionix brand and continues to offer customers the products
acquired by VMware, pursuant to the ongoing reseller agreement between EMC and VMware. Additionally, contingent amounts totaling up to
$25.0 million may be payable to EMC by the end of the second anniversary of the transfer. These amounts are contingent on EMC achieving
certain revenue milestones.
The net assets and expertise acquired from EMC constituted a business and were accounted for as a business combination between entities
under common control pursuant to generally accepted accounting principles. Accordingly, VMware included the carrying values of the
transferred assets and liabilities as of the date of transfer in its consolidated financial statements, as well as recorded the excess of the carrying
values over the cash consideration as an equity transaction. Contingent consideration, if any, paid by VMware to EMC will be recorded as an
equity transaction when due. VMware did not revise its historical consolidated financial statements as the historical impact of the acquired net
assets was not material.
During the three months ended December 31, 2010, $10.6 million of the $25.0 million contingent amounts was paid to EMC. This amount
was recorded as an offset to the initial capital contribution from EMC.
87
Other current assets
$
6,328
Intangible assets
114,100
Goodwill
178,160
Deferred tax assets
48,323
Total tangible and intangible assets acquired
346,911
Unearned revenue
(21,425
)
Deferred tax liabilities
(30,103
)
Accrued liabilities and other
(2,413
)
Total liabilities assumed
(53,941
)
Fair value of tangible and intangible assets acquired and liabilities assumed
$
292,970