Acquisitions

MXI Security

On June 4, 2011, we acquired substantially all of the assets of MXI Security, a leader in high-security and privacy technologies, from Memory Experts International Inc. MXI Security sells encrypted and biometric USB drives (MXI Stealth Key), encrypted and biometric hard disk drives (MXI Stealth HD), secure portable desktop solutions (Stealth Zone), and software solutions. MXI Security products contain various security features such as password authentication, encryption, and remote manageability. The preliminary purchase price consisted of a cash payment of $24.5 million and the estimated fair value of future contingent consideration of $9.2 million, totaling $33.7 million.

The preliminary purchase price allocation resulted in goodwill of $21.9 million, made up of expected strategic synergies and intangible assets that do not qualify for separate recognition. MXI Security is included in our existing Americas operating segment and functions as a business with discrete financial information available. Therefore, MXI Security is a separate reporting unit for the purposes of goodwill impairment testing. Goodwill will be tested for impairment annually or when there are indications that impairment might exist.

The following table illustrates our preliminary allocation of the purchase price to the assets acquired and liabilities assumed:



(In millions)	Amount
Accounts receivable and other assets	$	0.8
Inventories	1.1
Intangible assets	10.6
Goodwill	21.9
Accounts payable and other liabilities	(0.7		)
	$	33.7

Our preliminary allocation of the purchase price to the assets acquired and liabilities assumed resulted in the recognition of the following intangible assets:



			Weighted
(In millions)	Amount		Average Life
Trademark	$	0.7	10 years
Supply agreement	1.4		3 years
Customer relationships	1.0		8 years
Proprietary technology	7.5		6 years
	$	10.6

The effects of the acquisition did not materially impact our 2011 results of operations. Therefore, pro forma disclosures are not required and, accordingly, are not included.

BeCompliant Corporation (doing business as Encryptx)

On February 28, 2011, we acquired substantially all of the assets of BeCompliant Corporation (doing business as Encryptx), a technology leader in encryption and security solutions for removable storage devices and removable storage media. The purchase price was $2.3 million, consisting of a cash payment of $1.0 million and the estimated fair value of future contingent consideration of $1.3 million.

The purchase price allocation resulted in goodwill of $1.6 million, made up of expected strategic synergies and intangible assets that do not qualify for separate recognition. The goodwill was allocated to our existing Americas-Commercial reporting unit. Goodwill is considered impaired when its carrying amount exceeds its implied fair value. As of March 31, 2011, the carrying amount of all of our reporting units significantly exceeded their fair value and we performed an impairment test. Based on the goodwill test performed as of March 31, 2011, we determined that the carrying amount of the goodwill in the Americas-Commercial reporting unit, including the assets of Encryptx, exceeded the implied fair value and, therefore, the goodwill was fully impaired. As a result, a $1.6 million goodwill impairment charge was recorded during the three months ended March 31, 2011 in the Condensed Consolidated Statements of Operations.

The effects of the acquisition did not materially impact our 2011 results of operations. Therefore, pro forma disclosures are not required and, accordingly, are not included.