SanDisk 2011 Annual Report Download - page 173

This is a TAB type table. Insert
conts here. Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Net Tangible Liabilities. The allocation of the Pliant purchase price to the tangible assets acquired and
liabilities assumed as of May 24, 2011 is summarized below (in thousands).
Acquired
Tangible Assets
and Liabilities
Cash ................................................................................... $ 3,439
Other assets ............................................................................. 16,810
Total assets ......................................................................... 20,249
Accounts payable ........................................................................ (11,614)
Other current liabilities .................................................................... (21,138)
Total current liabilities .................................................................... (32,752)
Non-current liabilities ..................................................................... (9,949)
Total liabilities assumed ............................................................... (42,701)
Net tangible liabilities acquired .......................................................... $ (22,452)
Purchase Price Allocation. The total purchase price was allocated to Pliant’s net tangible and intangible
assets based upon their estimated fair values as of May 24, 2011. The excess purchase price over the value of the
net tangible liabilities and identifiable intangible assets was recorded as goodwill. The fair values assigned to
tangible and intangible assets acquired and liabilities assumed are based on estimates and assumptions of
management. These estimates include those related to the forecast used to value the intangible assets assumed,
including the allocation of developed technology and in-process research and development, and the fair value of
inventory and obligations related to excess committed purchases.
The following table presents the allocation of the Pliant purchase price (in thousands):
Purchase Price
Allocation
Net tangible liabilities acquired .............................................................. $ (22,452)
Intangible assets:
Developed technology ................................................................. 161,400
Trademarks .......................................................................... 5,300
Customer relationships ................................................................. 12,200
In-process research and development ..................................................... 36,200
Covenants not to compete .............................................................. 700
Total intangible assets ............................................................. 215,800
Goodwill ................................................................................ 154,899
Net deferred tax asset ...................................................................... (26,606)
Total purchase price ............................................................... $ 321,641
The total weighted-average amortization period for finite-lived intangible assets is 4.8 years. The intangible
assets are amortized based on the period when the economic benefits of the intangible assets are expected to be
utilized, which is straight-line. The goodwill resulted from expected synergies from the transaction, including the
Company’s supply of NAND flash and complementary products, which will enhance the Company’s overall
product portfolio, and is not deductible for tax purposes.
Acquisition-related costs of $1.5 million during the fiscal year ended January 1, 2012 were related to legal,
regulatory and accounting fees, and expensed to General and administrative expense in the Consolidated
Statement of Operations. Pliant’s prior period financial results are not considered material to the Company.
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