Memorex 2009 Annual Report Download - page 55

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was $7.3 million, consisting of a cash payment of $7.0 million and $0.3 million of direct acquisition costs. We may pay
additional cash consideration of up to $6 million, contingent on future financial performance of the acquired business.
Additional cash consideration, if paid, will be recorded as additional goodwill.
The purchase price allocation resulted in goodwill of $5.0 million. The following table illustrates our allocation of the
purchase price to the assets acquired and liabilities assumed:
Amount
(In millions)
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.4
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1
Fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.2
Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.0
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.0)
$ 7.3
Goodwill impairment of $2.0 million was recorded during the year ended December 31, 2008. As of December 31,
2009, $3.0 million of goodwill remains in the Consolidated Balance Sheet.
Our allocation of the purchase price to the assets acquired and liabilities assumed resulted in the recognition of the
following intangible assets:
Amount
Weighted
Average
Life
(In millions)
Trade names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2.1 10 years
Intellectual property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 6 years
Customer relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9 7 years
Non-compete. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.3 3 years
$4.6
The effects of the acquisition did not materially impact our 2008 results of operations. Therefore, pro forma
disclosures are not included.
Imation Corporation Japan
On March 16, 2008, we completed the acquisition of the 40 percent minority interest in Imation Corporation Japan
(ICJ). The purchase price for the acquisition was $8.0 million, which was paid in cash. The transaction was accounted for
using the step acquisition method which requires the allocation of the excess purchase price to the fair value of net assets
acquired. The excess purchase price is determined as the difference between the cash paid and the historical book value
of the interest in net assets acquired.
The following table presents the excess purchase price over historical book value:
Amount
(In millions)
Cash consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8.0
Interest acquired in historical book value of ICJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.1)
Excess purchase price over historical book value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.9
48
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)