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APPLIED MICRO CIRCUITS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
3. Acquisitions
The Company completed a number of acquisitions in fiscal 2001 using the purchase method of accounting.
The accompanying consolidated financial statements include the results of operations of each company acquired
from the date of acquisition. The acquired companies are as follows:
MMC Networks, Inc.—On October 25, 2000, the Company acquired MMC Networks, a fabless
semiconductor company that provides network processors, traffic management and switch fabric ICs. Under
the terms of the merger agreement, in exchange for all of the outstanding stock of MMC, the Company
issued 41,392,404 shares of its common stock and assumed options to purchase 7,981,595 shares of its
common stock.
YuniNetworks, Inc.—On June 8, 2000, the Company completed the acquisition of YuniNetworks, a
developer of scalable switch fabric ICs. Under the terms of the merger agreement, in exchange for all
YuniNetworks’ shares of common and preferred stock, the Company issued 4,048,646 shares of its common
stock and assumed options to purchase 225,776 shares of its common stock. Pursuant to a separate
agreement, AMCC purchased 10% of the YuniNetworks’ shares held by the majority stockholder of
YuniNetworks for $8.9 million in cash.
Others—During fiscal 2001, the Company also completed the acquisitions of pBaud, Chameleon,
SiLUTIA and RTC for a total purchase price of $73.2 million.
In connection with these transactions, the Company conducted independent valuations of the intangible
assets acquired in order to allocate the purchase price in accordance with Accounting Principles Board Opinion
No. 16. The Company allocated the excess purchase price over the fair value of net tangible assets acquired to the
following identifiable intangible assets: developed technology, assembled workforce, acquired in-process
research and development ( “IPR&D”), and trademarks/tradenames.
The total purchase price was allocated as follows (in thousands):
MMC YuniNetworks Others Total
Net tangible assets (liabilities) ....................... $ 126,866 $ 2,118 $ (1,457) $ 127,527
In-process research and development .................. 176,700 21,800 3,600 202,100
Goodwill and other intangibles ....................... 4,128,686 192,365 42,935 4,363,986
Deferred tax liabilities .............................. (301,129) — (16,420) (317,549)
Deferred compensation ............................. 391,821 2,488 44,536 438,845
Purchased inventory fair value adjustment .............. 26,907 — — 26,907
Total consideration ............................ $4,549,851 $218,771 $ 73,194 $4,841,816
Total consideration issued in the purchase acquisitions is as follows (in thousands):
MMC YuniNetworks Others Total
Value of securities issued ............................ $3,919,108 $197,545 $62,356 $4,179,009
Assumption of options .............................. 578,093 11,467 7,288 596,848
4,497,201 209,012 69,644 4,775,857
Cash paid and merger fees ........................... 52,650 9,759 3,550 65,959
$4,549,851 $218,771 $73,194 $4,841,816
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