Quarterly report pursuant to Section 13 or 15(d)

Business Combinations (Tables)

v3.20.2
Business Combinations (Tables)
 9 Months Ended
Sep. 30, 2020
Business Acquisition [Line Items]  
Business Acquisition, Pro Forma Information
The following table presents unaudited pro forma combined financial information for each of the periods presented, as if the acquisitions of the WiFi and Broadband assets business and NanoSemi had occurred at the beginning of fiscal year 2019:

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
(in thousands)
Net revenue – proforma combined $ 219,419  $ 181,438  $ 508,449  $ 541,067 
Net income (loss) – proforma combined $ (17,324) $ (23,470) $ (103,108) $ (126,340)
Business Acquisition, Pro Forma Information, Nonrecurring Adjustments The following adjustments were included in the unaudited pro forma combined net revenues:
Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
(in thousands)
Net revenue $ 156,633  $ 80,020  $ 283,880  $ 247,162 
Add: Net revenue – acquired businesses 62,786  101,418  224,569  293,905 
Net revenues – proforma combined $ 219,419  $ 181,438  $ 508,449  $ 541,067 
    The following adjustments were included in the unaudited pro forma combined net loss:
Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
(in thousands)
Net loss $ (36,645) $ (4,714) $ (73,921) $ (11,794)
Add: Results of operations – acquired businesses (3,875) (22,075) (63,882) (75,994)
Less: Proforma adjustments
Depreciation of property and equipment 2,101  934  4,358  948 
Amortization of intangible assets 1,615  3,923  10,119  11,369 
Amortization of inventory step-up 14,445  —  14,445  (32,945)
Acquisition and integration expenses 7,471  —  12,803  (12,803)
Interest expense (571) (2,120) (6,202) (6,488)
Other expense 82  324  1,867  2,287 
Income taxes 762  258  14  (920)
Net loss – proforma combined $ (14,615) $ (23,470) $ (100,399) $ (126,340)
Net loss per share – proforma combined:
Basic $ (0.20) $ (0.33) $ (1.37) $ (1.77)
Diluted $ (0.20) $ (0.33) $ (1.37) $ (1.77)
Shares used to compute net loss per share – proforma combined:
Basic 74,023  72,170  73,472  71,557 
Diluted 74,023  72,170  73,472  71,557 
WiFi and Broadband assets business [Member]  
Business Acquisition [Line Items]  
Schedule of Business Acquisitions, by Acquisition
The following table summarizes the fair value of purchase price consideration to acquire the WiFi and Broadband assets business (in thousands):

Description Amount
Fair value of purchase consideration:
Cash $ 150,000 
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed
The following is an allocation of purchase price as of the July 31, 2020 acquisition closing date based upon a preliminary estimate of the fair value of the assets acquired and the liabilities assumed by the Company in the acquisition (in thousands):
Description Amount
Preliminary purchase price allocation:
Inventory $ 67,100 
Property and equipment, net 17,641 
Identifiable intangible assets 58,000 
Accrued expenses (68)
Accrued compensation (7,916)
Other long-term liabilities (8,197)
Identifiable net assets acquired 126,560 
Goodwill 23,440 
Total purchase price $ 150,000 
The fair value of inventories acquired with the WiFi and Broadband assets business included an acquisition accounting fair market value step-up of $32.9 million. The Company recognized $14.4 million in amortization of inventory step-up in cost of sales in the consolidated statements of operations for the three and nine months ended September 30, 2020.
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination The following is a summary of identifiable intangible assets acquired and the related expected lives for the finite-lived intangible assets (in thousands):
Category Estimated Life in Years Fair Value
Finite-lived intangible assets:
Developed technology 7 $ 43,200 
Customer-related intangible 5 6,800 
Product backlog 0.58 800 
50,800 
Indefinite-lived intangible assets:
IPR&D N/A 7,200 
Total identifiable intangible assets acquired $ 58,000 
NanoSemi, Inc. [Member]  
Business Acquisition [Line Items]  
Schedule of Business Acquisitions, by Acquisition
The following table summarizes the fair value of purchase price consideration to acquire NanoSemi (in thousands):
Description Amount
Fair value of purchase consideration:
Cash $ 10,000 
Common stock issued(1)
17,080 
Deferred payments(2)
34,100 
Contingent consideration(3)
3,800 
Total purchase price $ 64,980 
_________________
(1) The fair value of common stock issued in the merger is based on 804,163 shares issued on the September 9, 2020 acquisition date at the closing price of the Company’s common stock of $21.24 per share.
(2) The fair value of the deferred payments was determined by discounting to present value payments totaling $35.0 million expected to be made to NanoSemi securityholders throughout 2021.
(3) The fair value of contingent consideration is based on applying the Monte Carlo simulation method to forecast achievement under various contingent consideration events which may result in up to $35.0 million in payments subject to the acquired business’s satisfying certain financial objectives from July 1, 2020 through December 31, 2022, under the Merger Agreement. Key inputs in the valuation include forecasted revenue, revenue volatility and discount rate. Underlying forecast mathematics were based on Geometric Brownian Motion in a risk-neutral framework and discounted back to the applicable period in which the accumulative thresholds were achieved at discount rates commensurate with the risk and expected payout term of the contingent consideration.
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed
The following is an allocation of purchase price as of the September 9, 2020 acquisition closing date based upon a preliminary estimate of the fair value of the assets acquired and the liabilities assumed by the Company in the acquisition (in thousands):
Description Amount
Preliminary purchase price allocation:
Accounts receivable, net $ 175 
Prepaid expenses and other current assets 774 
Property and equipment, net 177 
Leased right-of-use assets 1,805 
Intangible assets, net 30,300 
Accounts payable (602)
Accrued expenses and other current liabilities (323)
Accrued compensation (223)
Long-term lease liabilities (1,546)
Other long-term liabilities (6,363)
Identifiable net assets acquired 24,174 
Goodwill 40,806 
Total purchase price $ 64,980 
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination
The following is a summary of identifiable intangible assets acquired and the related expected lives for the finite-lived intangible assets (in thousands):
Category Estimated Life in Years Fair Value
Finite-lived intangible assets:
Developed technology 7 $ 24,400 
Trademarks and tradenames 7 1,200 
Customer-related intangible 5 3,000 
Product backlog 5.33 1,700 
Total identifiable intangible assets acquired $ 30,300