Business Combination

3 Months Ended

Jul. 27, 2012

Business Combination

5.  Business Combination

On May 6, 2011, we completed the acquisition of certain assets related to the Engenio external storage systems business (Engenio) of LSI Corporation (LSI). We paid LSI $480.0 million in cash and also assumed certain liabilities related to Engenio. During the three years following the acquisition, LSI will pay us a total of $13.0 million to service certain LSI customer warranties. This acquisition enables us to address growing customer requirements in the areas of high bandwidth and intensive analytics workloads such as video, including full-motion video capture and digital video surveillance, as well as high-performance computing applications, such as genomics sequencing and scientific research.

The purchase price was allocated to Engenio’s net tangible and intangible assets as of the date of acquisition based on various fair value estimates and analyses, including work performed by third-party valuation specialists.

The following are the estimated fair value of assets acquired and liabilities assumed as of the closing date (in millions):

Current assets	$	49.8
Property and equipment		33.3
Identified intangible assets		272.1
Goodwill		143.7
Other assets		9.3
Total assets acquired		508.2
Current liabilities		(20.9	)
Other liabilities		(7.3	)
Total purchase price	$	480.0

As this was an asset acquisition, U.S. goodwill is deductible for income tax purposes. The goodwill is comprised of expected synergies in utilizing Engenio’s technology in our products and channels (and vice versa), reduction in future combined research and development expenses, and intangible assets, such as acquired workforce, that do not qualify for separate recognition.