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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Security products contain various security features such as password authentication, encryption and remote manageability.
The purchase price consisted of a cash payment of $24.5 million and the estimated fair value of future contingent
consideration of $9.2 million, totaling $33.7 million.
The purchase price allocation resulted in goodwill of $21.9 million, consisting of expected strategic synergies and
intangible assets that do not qualify for separate recognition. MXI Security is included in our existing Americas operating
segment and is included in the Mobile Security reporting unit for the purposes of goodwill impairment testing. This goodwill is
deductible for tax purposes. See Note 6 here for more information regarding goodwill.
Future contingent consideration consists of an earn-out payments which may be paid based on incremental revenue of
the acquired business and incremental gross margin of the acquired business. The earn-out payments will be between $0.0
and $45.0 million. We revalue this contingent consideration each reporting period. Based on our analysis of fair value as of
December 31, 2011, the value at acquisition of such contingent consideration obligation equaled the estimated fair value as of
December 31, 2011 and no adjustments were required.
The following table illustrates our allocation of the purchase price to the assets acquired and liabilities assumed:
Amount
(In millions)
Accounts receivable and other assets ............................................... $ 0.8
Inventories ................................................................... 1.1
Intangible assets ............................................................... 10.6
Goodwill ..................................................................... 21.9
Accounts payable and other liabilities ............................................... (0.7)
$33.7
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)
Trademark ......................................................... $ 0.7 10years
Supply agreement .................................................... 1.4 3years
Customer relationships ................................................ 1.0 8years
Proprietary technology ................................................. 7.5 6years
$10.6
BeCompliant Corporation (doing business as Encryptx)
On February 28, 2011, we acquired substantially all of the assets of BeCompliant Corporation, doing business as
Encryptx (Encryptx), a technology leader in encryption and security solutions for removable storage devices and removable
storage media. The purchase price was $2.3 million, consisting of a cash payment of $1.0 million and the estimated fair value
of future contingent consideration of $1.3 million. The total amount of contingent consideration that could become payable
under the terms of the agreement is $1.5 million. We revalue this contingent consideration each reporting period. Based on
our analysis of fair value as of December 31, 2011, the value at acquisition of such contingent consideration obligation
equaled the estimated fair value as of December 31, 2011 and no adjustments were required.
The purchase price allocation resulted in goodwill of $1.6 million, consisting of expected strategic synergies and
intangible assets that do not qualify for separate recognition. This goodwill is deductible for tax purposes. The goodwill was
54