Visa 2011 Annual Report Download - page 98
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Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2011
(in millions, except as noted)
CyberSource Acquisition. On July 21, 2010, the Company completed its acquisition of all of the outstanding shares of common stock of CyberSource
Corporation, a leading provider of electronic payment, risk management and payment security solutions to online merchants. The combination was executed
to accelerate the growth of Visa's eCommerce category and enhance the value of the Company's network, product and service offerings to financial
institutions, merchants, partners and consumers.
Total purchase consideration was approximately $2 billion, paid with cash on hand as follows:
Purchase
Consideration
(in millions)
Acquisition of approximately 72 million shares of outstanding common stock of CyberSource at $26.00 per share $ 1,866
Fair value of earned stock options settled 86
Total purchase price $ 1,952
Total purchase consideration has been allocated to the tangible and identifiable intangible assets and to liabilities assumed based on their respective fair
values on the acquisition date. Excess purchase consideration over net assets assumed was recorded as $1.2 billion of goodwill, which represents the value
that is expected from expanding the Company's online payment and related fraud and security management capabilities, and other synergies. The Company
allocates goodwill to reporting units based on the reporting unit expected to benefit from the acquisition. Of the $1.2 billion, approximately $0.8 billion was
allocated to a second reporting unit. The remainder was allocated to the Company's original reporting unit to reflect the incremental growth and synergy this
acquisition will provide to the Company's existing business. None of the additional goodwill is expected to be deductible for tax purposes. The following table
summarizes the purchase price allocation.
Fair Value
(in millions)
Tangible assets and liabilities
Current assets $ 259
Non-current assets(1) 150
Current liabilities (45)
Non-current liabilities (256)
Intangible assets 605
Goodwill 1,239
Net assets acquired $ 1,952
(1) Non-current assets include $122 million of technology assets acquired, which have a weighted-average useful life of 7 years and are recognized in
property, equipment and technology, net on the consolidated balance sheets.
97