Creative 2000 Annual Report Download - page 39

Download and view the complete annual report

Please find page 39 of the 2000 Creative annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 44

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44

39
NOTE 15 – ACQU ISITIONS AND INVESTMENTS
Acquisitions
In November 1997, Creative paid $14.0 million from existing cash resources for all the assets of the NetMedia Division of
OPTi Inc. and received warrants to purchase 200,000 shares of OPTi’s common stock at a price of $10 per share. The
NetMedia Division is in the business of research, development and sales of audio chipsets. In December 1997, Creative
completed the acquisition of the remaining 76% of the outstanding shares of Cambridge SoundWorks, Inc. (“Cambridge”)
through a tender offer for cash in the amount of approximately $35.0 million. Cambridge manufactures home stereo, car
stereo, home theater and computer speakers. Creative purchased the initial 24% of the outstanding shares of Cambridge
in March 1997. In December 1997, Creative acquired for cash all outstanding shares of Ensoniq for approximately $77.0
million. Ensoniq is a key innovator in the design and development of PCI audio microchip technology and has strong brand
recognition associated with its line of electronic musical instruments.
Creative accounted for these acquisitions using the purchase method of accounting and accordingly has included the results
of their operations from their respective acquisition dates. Excluding the $60.3 million write-off of acquired in-process
technology from these companies required by US GAAP, the aggregate impact on Creative’s results of operations from these
acquisitions was not material.
The allocation of Creative’s aggregate purchase price for the above three acquisitions to net tangible assets, in-process
technology and identifiable intangible assets acquired was based on independent appraisals and is summarized below. The
tangible assets acquired primarily comprised inventory, accounts receivable and fixed assets. The intangible assets are
amortized over their respective benefit periods, which range from one to five years.
US$’000
Net tangible assets $ 20,532
In-process technology 60,300
Intangible assets 50,494
131,326
Net carrying value of initial equity interest in Cambridge (4,662)
Cash acquired in transactions (298)
Net cash used for acquisitions of Cambridge, Ensoniq, and
NetMedia Division of OPTi during fiscal year 1998 $ 126,366