3Ware 2003 Annual Report Download - page 72

APPLIED MICRO CIRCUITS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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.
Other—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 the then current guidance, 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 Other Total
Net tangible assets (liabilities) ....................... $ 126,866 $ 2,118 $ (1,457) $ 127,527
In-process research & 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 Other 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
In-Process Research and Development
The related purchased IPR&D for each of the above acquisitions represents the present value of the
estimated after-tax cash flows expected to be generated by the purchased technology, which, at the acquisition
dates, had not yet reached technological feasibility. The cash flow projections for revenues were based on
estimates of relevant market sizes and growth factors, expected industry trends, the anticipated nature and timing
of new product introductions by the Company and its competitors, individual product sales cycles and the
estimated life of each product’s underlying technology. Estimated operating expenses and income taxes were
deducted from estimated revenue projections to arrive at estimated after-tax cash flows. Projected operating
expenses include cost of goods sold, marketing and selling expenses, general and administrative expenses, and
research and development, including estimated costs to maintain the products once they have been introduced
into the market and are generating revenue.
F-17