Autodesk 2007 Annual Report Download - page 184

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AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 15. Business Combinations (Continued)
Emerging Solutions, Inc. (“Constructware”)
In March 2006, Autodesk acquired Constructware, a privately-held company, for cash consideration
of approximately $45.7 million. Autodesk incorporated Constructware’s collaborative technology solutions
into the Platform Technology Division of the Design Solutions Segment. This acquisition provides on-
demand communication and collaboration solutions and is intended to enable Autodesk to rapidly
expand its Buzzsaw collaborative project management solution with Constructware’s cost, bid and risk
management capabilities.
Management’s allocation of the purchase price, which was based on a valuation of acquired assets
and liabilities performed in-part by a third-party appraiser, is as follows:
Constructware:
Developed technologies (6 year useful life). . . . . . . . . . . . . . . . . . . . . . $ 5.1
Customer relationships (7 year useful life). . . . . . . . . . . . . . . . . . . . . . . 13.0
Customer contracts (7 year useful life) . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Trade name (6 year useful life) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9
Goodwill..................................................... 35.9
Deferred revenue............................................. (5.1)
Restructuring reserve ......................................... (0.4)
Net tangible assets ........................................... (4.8)
$45.7
Customer relationships and customer contracts represent the underlying relationships and
agreements with Constructware’s existing customers. Trade name represents the estimated fair value
of the Constructware trade name and trademarks. The $35.9 million of goodwill, which represents the
premium paid for Constructware’s established products, is not deductible for tax purposes. Deferred
revenue represents the estimated fair value of the support and maintenance obligations assumed
from Constructware in connection with this acquisition. Autodesk estimates that these support and
maintenance obligations will be substantially fulfilled by fiscal 2010.
Autodesk has not identified any material pre-acquisition contingencies where a liability is probable
and the amount of the liability can be reasonably estimated. If information becomes available prior to
the end of the purchase price allocation period that would indicate that such a liability is probable and
that the amounts can be reasonably estimated, such liability would be included as an adjustment to the
purchase price allocation.
Alias Systems Holdings, Inc. (“Alias”)
In January 2006, Autodesk acquired Alias Systems Holdings, Inc., a privately held developer of 3D
graphics technology for total cash consideration of $196.8 million. A portion of the total cash consideration,
$36.4 million, has been set aside in an escrow account for two years following the acquisition date. The
escrow is to be held as partial security for certain losses incurred by Autodesk in the event of certain
breaches of the representations and warranties covered in the agreement.
In addition, Autodesk also assumed all outstanding unvested options to purchase shares of Alias
common stock, which converted into options to purchase 198,405 shares of Autodesk common stock.