AMD 2007 Annual Report Download - page 107

Table of Contents
NOTE 3: ATI Acquisition
On October 25, 2006, the Company completed the acquisition of all of the outstanding shares of ATI, a publicly held company headquartered in Markham,
Ontario, Canada (the Acquisition) for a combination of cash and shares of the Company’s common stock. ATI was engaged in the design, manufacture and sale
of innovative 3D graphics and digital media silicon solutions. The Company believes that the acquisition of ATI allows it to deliver products that better fulfill the
increasing demand for more integrated computing solutions. The Company included the operations of ATI in its consolidated financial statements beginning on
October 25, 2006.
The aggregate consideration paid by the Company for all outstanding ATI common shares consisted of approximately $4.3 billion of cash and 58 million
shares of the Company’s common stock. In addition, the Company also issued options to purchase approximately 17.1 million shares of the Company’s common
stock and approximately 2.2 million comparable AMD restricted stock units in exchange for outstanding ATI stock options and restricted stock units. The vested
portion of these options and restricted stock units was valued at approximately $144 million. The unvested portion, valued at approximately $69 million, is being
amortized to compensation expense over the options’ remaining vesting periods. To finance a portion of the cash consideration paid, the Company borrowed $2.5
billion under the October 2006 Term Loan. This term loan was fully repaid in 2007 (see Note 9). The total purchase price for ATI was $5.6 billion including
acquisition-related costs of $25 million and consisted of:
(In millions,
except share
amounts)
Acquisition of all of the outstanding shares, stock options, restricted stock units and other stock-based awards
of ATI in exchange for:
Cash $ 4,263
58 million shares of the Company’s common stock 1,172
Fair value of vested options and restricted stock units issued 144
Acquisition related transaction costs 25
Total purchase price $ 5,604
Purchase Price Allocation
The total purchase price was allocated to ATI’s tangible and identifiable intangible assets and liabilities based on their estimated fair values as of
October 24, 2006 as set forth below:
(In millions)
Cash and marketable securities $ 500
Accounts receivable 290
Inventories 431
Goodwill 3,217
Developed product technology 752
Game console royalty agreement 147
Customer relationships 257
Trademarks and trade names 62
Customer backlog 36
In-process research and development 416
Property, plant and equipment 143
Other assets 25
Accounts payable and other liabilities (631)
Reserves for exit costs (8)
Debt and capital lease obligations (31)
Deferred revenues (2)
Total purchase price $ 5,604
102
Source: ADVANCED MICRO DEVIC, 10-K, February 26, 2008