Salesforce.com 2013 Annual Report Download - page 87

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Other Fiscal 2013 Business Combinations
During fiscal 2013, the Company acquired five additional companies for $15.1 million in cash, net of cash
acquired, and has included the financial results of these companies in its consolidated financial statements from
the date of each respective acquisition. The Company accounted for these transactions as business combinations.
In allocating the purchase consideration based on estimated fair values, the Company recorded $4.1 million of
acquired intangible assets with useful lives of one to three years, $12.4 million of goodwill, $0.3 million of net
tangible liabilities and $1.0 million of deferred tax liabilities. Some of this goodwill balance is deductible for
U.S. income tax purposes. With the exception of Buddy, none of the aforementioned business combinations,
individually and in the aggregate, were material to the pro forma combined historical results of operations of the
Company.
Fiscal Year 2012
Radian6 Technologies Inc.
In May 2011, the Company acquired for cash and the Company’s common stock the outstanding stock of
Radian6 Technologies, Inc. (“Radian6”), a cloud application vendor based in Canada that provides customers
with social media monitoring, measurement and engagement solutions. The Company acquired Radian6 to,
among other things, expand its social enterprise market opportunities. The Company has included the financial
results of Radian6 in the consolidated financial statements from the date of acquisition, which have not been
material to date. The acquisition date fair value of the consideration transferred for Radian6 was approximately
$336.6 million, which consisted of the following:
Fair value of consideration transferred (in thousands, except number
of share data):
Cash ............................................ $282,600
Common stock (436,167 shares) ...................... 49,319
Fair value of stock options assumed ................... 4,729
Total ............................................ $336,648
The value of the share consideration for the Company’s common stock was based on the closing price of
$136.19 on the day of the acquisition. The fair value of the stock options assumed by the Company was
determined using the Black-Scholes option pricing model and the share conversion ratio of 0.196 was applied to
convert Radian6 options to the Company’s options.
The following table summarizes the estimated fair values of assets acquired and liabilities assumed as of the
date of acquisition:
(in thousands)
Tangible assets .................................... $ 12,364
Current and noncurrent liabilities ...................... (12,757)
Deferred revenue .................................. (680)
Deferred tax liability ............................... (27,306)
Intangible assets ................................... 103,000
Goodwill ......................................... 262,027
Net assets acquired ................................. $336,648
The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets
acquired was recorded as goodwill. The fair values assigned to tangible and identifiable intangible assets
acquired and liabilities assumed were based on management’s estimates and assumptions. During fiscal 2013 the
Company finalized its assessment of fair value of the assets and liabilities assumed at acquisition date.
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