Business Combination (Tables)
|
12 Months Ended |
Dec. 31, 2017 |
|---|
| Business Acquisition [Line Items] |
|
| Schedule of Recognized Identified Assets Acquired and Liabilities Assumed |
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 expenses 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 |
|
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 expenses and other current assets |
2,288 |
|
Property and equipment |
3,442 |
|
Identifiable intangible assets |
249,500 |
|
Deferred tax assets |
7,493 |
|
Other assets |
5,434 |
|
Accounts payable |
(12,385 |
) |
Accrued expenses and other current liabilities |
(10,464 |
) |
Accrued compensation |
(5,253 |
) |
Other long-term liabilities |
(3,030 |
) |
Identifiable net assets acquired |
532,734 |
|
Goodwill |
159,993 |
|
Total purchase price |
$ |
692,727 |
|
|
| Identified Intangible Assets Acquired |
The following table presents details of the acquired identifiable intangible assets 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 |
|
4.7 |
|
$ |
12,600 |
|
The following table presents details of the acquired identifiable intangible assets of Exar:
|
|
|
|
|
|
|
|
|
|
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 |
|
6.0 |
|
232,900 |
|
In-process research and development |
|
N/A |
|
16,600 |
|
Total intangible assets |
|
|
|
$ |
249,500 |
|
|
| Unaudited Pro Forma Financial Information |
The following table presents unaudited pro forma combined financial information for each of the periods presented, as if the 2017 acquisitions of Exar and the G.hn business had occurred at the beginning of fiscal year 2016:
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
|
2017 |
|
2016 |
|
(in thousands) |
Net revenue – proforma combined |
$ |
456,822 |
|
|
$ |
499,801 |
|
Net income (loss) – proforma combined |
$ |
16,682 |
|
|
$ |
(42,345 |
) |
The following adjustments were included in the unaudited pro forma combined net revenues:
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
|
2017 |
|
2016 |
|
(in thousands) |
Net revenue |
$ |
420,318 |
|
|
$ |
387,832 |
|
Add: Net revenue – acquired businesses |
36,504 |
|
|
111,969 |
|
Net revenues – proforma combined |
$ |
456,822 |
|
|
$ |
499,801 |
|
|
| Business Acquisition, Pro Forma Information, Nonrecurring Adjustments [Table Text Block] |
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
|
2017 |
|
2016 |
|
(in thousands) |
Net income (loss) |
$ |
(9,187 |
) |
|
$ |
61,292 |
|
Add: Results of operations – acquired businesses |
(8,916 |
) |
|
(3,417 |
) |
Less: Proforma adjustments |
|
|
|
Depreciation of property and equipment |
1,792 |
|
|
(645 |
) |
Amortization of intangible assets |
(8,045 |
) |
|
(44,075 |
) |
Amortization of inventory step-up |
25,557 |
|
|
(25,557 |
) |
Impairment of intangible assets |
— |
|
|
1,519 |
|
Acquisition and integration expenses |
17,342 |
|
|
(17,342 |
) |
Interest expense |
(2,863 |
) |
|
(14,120 |
) |
Income taxes |
1,002 |
|
|
— |
|
Net income (loss) – proforma combined |
$ |
16,682 |
|
|
$ |
(42,345 |
) |
|
|
|
|
Net income (loss) per share – proforma combined: |
|
|
|
Basic |
$ |
0.25 |
|
|
$ |
(0.66 |
) |
Diluted |
$ |
0.24 |
|
|
$ |
(0.66 |
) |
Shares used to compute net income (loss) per share – proforma combined: |
|
|
|
Basic |
66,252 |
|
|
63,781 |
|
Diluted |
69,665 |
|
|
63,781 |
|
|
| Schedule of Business Acquisitions by Acquisition, Consideration [Table Text Block] |
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 |
|
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 certain assumptions (Note 9). Such assumptions are based on MaxLinear’s best estimates, which impact the fair value of the options calculated under the Black-Scholes methodology and, ultimately, the total consideration recorded for the acquisition. |
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