SNPS » Topics » Note 5. Business Combinations

This excerpt taken from the SNPS 10-Q filed Jun 10, 2009.

Note 4.     Business Combinations

 

On December 18, 2008, the Company acquired the assets of a business for cash and incurred acquisition related costs.  The Company preliminarily allocated the total purchase consideration to the assets and liabilities acquired, including identifiable intangible assets, based on their respective fair values at the acquisition date, resulting in goodwill of $19.8 million, in process research and development expense of $0.6 million, and identifiable intangible assets of $6.9 million.  The intangible assets are being amortized over one to six years. Goodwill, which is deductible for tax purposes, represents the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired and will not be amortized.

 

This excerpt taken from the SNPS 10-Q filed Mar 9, 2009.

Note 4.     Business Combinations

 

On December 18, 2008, the Company acquired the assets of a business for cash and incurred acquisition related costs.  The Company preliminarily allocated the total purchase consideration to the assets and liabilities acquired, including identifiable intangible assets, based on their respective fair values at the acquisition date, resulting in goodwill of $19.8 million, in process research and development expense of $0.6 million, and identifiable intangible assets of $6.9 million.  The intangible assets are being amortized over one to six years. Goodwill, which is deductible for tax purposes, represents the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired and will not be amortized.

 

Other

 

During the first quarter of fiscal 2009, the Company paid $1.2 million for achievement of certain product milestones related to a prior acquisition. This payment was recorded as an adjustment to goodwill in the prior year.

 

This excerpt taken from the SNPS 10-Q filed Sep 9, 2008.

Note 5.          Business Combinations

 

On May 15, 2008, the Company acquired all outstanding shares of Synplicity, Inc. (Synplicity).  Synplicity was a leading supplier of innovative field programmable gate array (FPGA) and IC design and verification solutions that served a wide range of communications, military/aerospace, semiconductor, consumer, computer, and other electronic applications markets. The Company believes the acquisition will expand its technology portfolio, channel reach and total addressable market by adding complementary products and expertise for FPGA solutions and rapid ASIC prototyping.

 

Purchase Price.  Synopsys paid $8.00 per share for all outstanding shares including certain vested options of Synplicity for an aggregate cash payment of $223.3 million. Additionally, Synopsys assumed certain employee stock options and restricted stock units, collectively called “stock awards.” The total purchase consideration consisted of:

 

 

 

(in thousands)

 

Cash paid, net of cash acquired

 

$

180,618

 

Fair value of assumed vested or earned stock awards

 

4,169

 

Acquisition-related costs

 

8,865

 

Total purchase price consideration

 

$

193,652

 

 

Estimated acquisition related costs of $8.9 million consist primarily of professional services, severance and employee related costs and facilities closure costs.

 

Fair Value of Stock Awards Assumed.  An aggregate of 4.7 million shares of Synplicity stock options and restricted stock units were exchanged for Synopsys stock options and restricted stock units at an exchange ratio of 0.3392 per share. The fair value of stock options assumed was determined using a Black-Scholes valuation model. The fair value of stock awards vested or earned of $4.2 million was included as part of the purchase price. The fair value of unvested awards of $5.3 million will be recorded as compensation expense over the remaining service periods on a straight-line basis.

 

Preliminary Purchase Price Allocation.  In allocating the purchase price based on estimated fair values, we recorded approximately $118.4 million of goodwill, $80.0 million of identifiable intangible assets to be amortized over two to seven years, $4.8 million of in-process research and development, $29.9 million of remaining tangible assets, and $39.4 million of assumed liabilities. The Company has not yet finalized certain acquisition related costs and tax allocations.

 

Goodwill, representing the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired, was $118.4 million and will not be amortized and is not deductible for tax purposes. Goodwill primarily resulted from the Company’s expectation of synergies and growth from the integration of Synplicity’s technology with the Company’s technology and operations to provide an expansion of products and market reach.

 

Other

 

During the first quarter of fiscal 2008, the Company paid $0.4 million for achievement of certain product milestones related to a prior acquisition. This payment was an adjustment to goodwill.

 

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