AMD » Topics » 2. The Acquisition

This excerpt taken from the AMD 8-K filed Apr 23, 2007.

2. The Acquisition

On October 25, 2006, the Company completed the acquisition of all of the outstanding shares of ATI, a publicly held company headquartered in Markham, Ontario, Canada for a combination of cash and shares of the Company’s common stock. ATI is engaged in the design, manufacture and sale of innovative 3D graphics and digital media silicon solutions.

The aggregate consideration paid by the Company for all outstanding ATI common shares consisted of approximately $4.3 billion of cash and 58 million shares of the Company’s common stock. In addition, the Company also assumed substantially all issued and outstanding ATI stock options, restricted stock units and other stock-based awards as of October 24, 2006 by issuing options to purchase approximately 17.1 million shares of the Company’s common stock and approximately 2.2 million comparable AMD restricted stock units in exchange. To finance a portion of the cash consideration paid, the Company borrowed $2.5 billion under a term loan with a third party financial institution. The total purchase price for ATI was $5.6 billion and is comprised of:

 

     (In millions)

Cash

   $ 4,263

58 million shares of the Company’s common stock

     1,172

Fair value of vested options and restricted stock units issued

     144

Acquisition related transaction costs

     25
      

Total purchase price to be allocated

   $ 5,604
      

The fair value of the Company’s common stock issued was determined in accordance with EITF Issue No. 99-12, Determination of the Measurement Date for the Market Price of Acquirer Securities Issued in a Purchase Business Combination, which reflected the average of the closing prices of the Company’s common stock on the NYSE for the three trading days prior to October 25, 2006. The vested portion of the options and restricted stock units was approximately $144 million. The unvested portion of approximately $69 million will be amortized over the future remaining vesting periods.

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