3Ware 2005 Annual Report Download - page 80

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APPLIED MICRO CIRCUITS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Fiscal 2004
JNI Corporation—On October 28, 2003, the Company completed the acquisition of JNI Corporation, a
provider of Fibre Channel hardware and software products that form critical elements of storage area networks.
AMCC acquired all outstanding shares of JNI Corporation for approximately $196.4 million in cash and assumed
options to purchase approximately 4.3 million shares of AMCC’s common stock.
PRS Business—On September 30, 2003, the Company purchased assets and licensed intellectual property
associated with IBM’s Power PRS Switch Fabric product line for $47.8 million in cash. On January 1, 2004, the
Company exercised an option to purchase additional related assets located in France for $3 million.
In connection with these transactions, the Company conducted valuations of the intangible assets acquired in
order to allocate the purchase price in accordance with SFAS No. 141, “Business Combinations”, or SFAS 141.
In accordance with SFAS 141, the Company has allocated the excess purchase price over the fair value of net
tangible assets acquired to the identifiable intangible assets. The purchase price in each transaction was allocated
as follows (in thousands):
Fiscal 2005 Fiscal 2004
Total3ware
Embedded
Products
Business
Fiscal 2005
Subtotal JNI PRS Business
Fiscal 2004
Subtotal
Net tangible assets ........... $ 10,113 $ 3,700 $ 13,813 $ 70,515 $ 815 $ 71,330 $ 85,143
In-process research and
development .............. 8,000 5,400 13,400 16,100 5,700 21,800 35,200
Developed technology ........ 14,500 73,500 88,000 25,600 5,500 31,100 119,100
Backlog/customer
relationships .............. 300 1,900 2,200 1,000 400 1,400 3,600
Patents/core technology rights/
tradename ................ 6,100 20,700 26,800 7,800 1,700 9,500 36,300
Purchased inventory fair value
adjustment ................ 1,465 739 2,204 1,262 117 1,379 3,583
Stock based compensation ..... 19,024 — 19,024 4,157 — 4,157 23,181
Goodwill ................... 110,218 128,061 238,279 87,270 36,556 123,826 362,105
Total consideration ........... $169,720 $234,000 $403,720 $213,704 $50,788 $264,492 $668,212
The total consideration issued in the acquisitions is as follows (in thousands):
Fiscal 2005 Fiscal 2004
3ware
Embedded
Products
Business
Fiscal 2005
Subtotal JNI PRS Business
Fiscal 2005
Subtotal Total
Cash paid and merger fees ..... $145,832 $234,000 $379,832 $200,939 $50,788 $251,727 $631,559
Value of assumed options ...... 23,888 — 23,888 12,765 — 12,765 36,653
Total consideration ........... $169,720 $234,000 $403,720 $213,704 $50,788 $264,492 $668,212
The purchased inventory fair value adjustment represents the difference between the carrying value of work
in process and finished goods inventory and the estimated selling price less costs to sell the related inventory at
the date of acquisition.
F-18