Business Combinations Business Combinations (Tables)
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9 Months Ended |
Sep. 30, 2017 |
|---|
| Business Acquisition [Line Items] |
|
| Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] |
The following is an allocation of purchase price as of the May 12, 2017 closing date under the acquisition method of accounting. The purchase price allocation is based upon a preliminary estimate of the fair value of the assets acquired and the liabilities assumed by MaxLinear in the acquisition (in thousands):
|
|
|
|
|
Description |
Amount |
Preliminary purchase price allocation: |
|
Cash |
$ |
235,810 |
|
Accounts receivable |
11,363 |
|
Inventory |
48,536 |
|
Prepaid and other current assets |
2,351 |
|
Property and equipment |
4,273 |
|
Identifiable intangible assets |
249,500 |
|
Deferred tax assets |
4,830 |
|
Other assets |
5,434 |
|
Accounts payable |
(12,385 |
) |
Accrued expenses and other current liabilities |
(10,371 |
) |
Accrued compensation |
(5,258 |
) |
Other long-term liabilities |
(3,030 |
) |
Identifiable net assets acquired |
531,053 |
|
Goodwill |
161,674 |
|
Total purchase price |
$ |
692,727 |
|
The following is an allocation of purchase price as of the April 4, 2017 closing date under the acquisition method of accounting. The purchase price allocation is based upon an estimate of the fair value of the assets acquired and the liabilities assumed by MaxLinear in the acquisition (in thousands):
|
|
|
|
|
Description |
Amount |
Purchase price allocation: |
|
Inventory |
$ |
2,084 |
|
Prepaid and other current assets |
147 |
|
Property and equipment |
3,277 |
|
Identifiable intangible assets |
12,600 |
|
Deferred tax assets |
875 |
|
Other assets |
28 |
|
Accounts payable |
(1 |
) |
Accrued expenses |
(234 |
) |
Accrued compensation |
(2 |
) |
Other long-term liabilities |
(99 |
) |
Identifiable net assets acquired |
18,675 |
|
Goodwill |
2,325 |
|
Total purchase price |
$ |
21,000 |
|
|
| Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] |
|
|
|
|
|
|
|
|
|
|
Estimated Useful Life (in years) |
|
Fair Value (in thousands) |
Developed technology |
|
7.0 |
|
$ |
120,900 |
|
Trademarks and tradenames |
|
6.0 |
|
12,100 |
|
Customer-related intangible |
|
5.0 |
|
96,300 |
|
Product backlog |
|
0.5 |
|
3,600 |
|
Finite-lived intangible assets |
|
|
|
232,900 |
|
In-process research and development |
|
N/A |
|
16,600 |
|
Total intangible assets |
|
|
|
$ |
249,500 |
|
|
| Schedule of Business Acquisitions by Acquisition, Consideration [Table Text Block] |
The following table summarizes the fair value of purchase price consideration to acquire Exar (in thousands):
|
|
|
|
|
|
Acquisition Consideration |
|
Amount |
|
|
|
Cash (1)
|
|
$ |
688,114 |
|
Fair value of vested stock-based awards assumed (2)
|
|
4,613 |
|
Total |
|
$ |
692,727 |
|
__________________
|
|
(1) |
Cash consideration paid includes 51,953,635 shares ultimately tendered at $13.00 per share, or an aggregate total of $675.4 million, plus $12.7 million of cash paid to settle certain outstanding stock-based awards which were not assumed by MaxLinear in the merger.
|
|
|
(2)
|
MaxLinear assumed certain of Exar's outstanding stock-based awards as part of the merger, and estimated the fair value of such assumed stock-based awards. The portion allocated to purchase price consideration represents the vested assumed stock-based awards. The fair value of the MaxLinear equivalent stock options included in stock-based awards assumed was estimated using the Black-Scholes valuation model utilizing the assumptions noted below. The expected volatility of the MaxLinear stock price is based on the average historical volatility over the expected term based on daily closing stock prices. The expected term of the option is based on the remaining vesting period and contractual term of the options, using the simplified method of determining expected term as used by MaxLinear. The stock price volatility and expected term are based on MaxLinear’s best estimates at this time, both of which impact the fair value of the option calculated under the Black-Scholes methodology and, ultimately, the total consideration recorded for the acquisition. |
The following table summarizes the fair value of purchase price consideration to acquire the G.hn business (in thousands):
|
|
|
|
|
|
Acquisition Consideration |
|
Amount |
|
|
|
Cash |
|
$ |
21,000 |
|
Total |
|
$ |
21,000 |
|
|
| Business Acquisition, Pro Forma Information [Table Text Block] |
The following table presents unaudited pro forma combined financial information for each of the periods presented, as if the acquisitions of Exar and the G.hn business had occurred at the beginning of fiscal year 2016:
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|
|
|
|
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Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
(in thousands) |
Net revenues – proforma combined |
$ |
113,581 |
|
|
$ |
125,202 |
|
|
$ |
343,101 |
|
|
$ |
384,362 |
|
Net income (loss) – proforma combined |
$ |
4,929 |
|
|
$ |
(11,960 |
) |
|
$ |
21,755 |
|
|
$ |
(33,920 |
) |
|
| Business Acquisition, Pro Forma Information, Nonrecurring Adjustments [Table Text Block] |
The following adjustments were included in the unaudited pro forma combined net income (loss):
|
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|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
(in thousands) |
Net income (loss) |
$ |
(9,167 |
) |
|
$ |
9,679 |
|
|
$ |
10,261 |
|
|
$ |
52,944 |
|
Add: Results of operations – acquired business |
— |
|
|
(2,510 |
) |
|
(8,916 |
) |
|
(869 |
) |
Less: Proforma adjustments |
|
|
|
|
|
|
|
Depreciation of property, plant and equipment |
1,199 |
|
|
(217 |
) |
|
970 |
|
|
555 |
|
Amortization of intangible assets |
1,966 |
|
|
(10,055 |
) |
|
(9,498 |
) |
|
(33,717 |
) |
Amortization of inventory step-up |
9,715 |
|
|
(5,051 |
) |
|
15,818 |
|
|
(26,503 |
) |
Impairment of intangible assets |
— |
|
|
— |
|
|
— |
|
|
1,519 |
|
Acquisition and integration expenses |
982 |
|
|
— |
|
|
16,389 |
|
|
(16,389 |
) |
Interest expense |
360 |
|
|
(3,806 |
) |
|
(5,029 |
) |
|
(11,460 |
) |
Income tax benefit |
(126 |
) |
|
— |
|
|
1,760 |
|
|
— |
|
Net income (loss) – proforma combined |
$ |
4,929 |
|
|
$ |
(11,960 |
) |
|
$ |
21,755 |
|
|
$ |
(33,920 |
) |
|
|
|
|
|
|
|
|
Net income (loss) per share - proforma combined: |
|
|
|
|
|
|
|
Basic |
$ |
0.07 |
|
|
$ |
(0.19 |
) |
|
$ |
0.33 |
|
|
$ |
(0.53 |
) |
Diluted |
$ |
0.07 |
|
|
$ |
(0.19 |
) |
|
$ |
0.31 |
|
|
$ |
(0.53 |
) |
Shares used to compute net income (loss) per share - proforma combined |
|
|
|
|
|
|
|
Basic |
66,712 |
|
|
64,241 |
|
|
65,950 |
|
|
63,454 |
|
Diluted |
69,668 |
|
|
64,241 |
|
|
69,491 |
|
|
63,454 |
|
|
| G.hn business of Marvell [Member] |
|
| Business Acquisition [Line Items] |
|
| Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] |
The following table presents details of the identified intangible assets acquired of the G.hn business:
|
|
|
|
|
|
|
|
|
|
Estimated Useful Life (in years) |
|
Fair Value (in thousands) |
Developed technology |
|
7.0 |
|
$ |
7,100 |
|
Customer-related intangibles |
|
1.8 |
|
4,800 |
|
Covenant not-to-compete |
|
3.0 |
|
200 |
|
Product backlog |
|
0.8 |
|
500 |
|
Total identifiable intangible assets |
|
|
|
$ |
12,600 |
|
|