Note 11—Acquisition

On January 21, 2014, we completed the acquisition of Xsens Holding B.V. (Xsens), a privately held, high-performance sensor company in a share purchase transaction for approximately $57.8 million in cash. Xsens is a leading innovator in 3D motion tracking technology and products. Its sensor fusion technologies enable a seamless interaction between the physical and the digital world in consumer devices and professional applications such as 3D character animation, motion analysis, and industrial control & stabilization. The purpose of the acquisition was to grow revenue as their technology is complementary to our own MEMS-based solutions.

We finalized the purchase accounting for the Xsens acquisition during fiscal year 2014. The following table summarizes the fair values of the separately identifiable assets acquired and liabilities assumed as of January 21, 2014:


	Estimated Fair Value
	(In Millions)
Fair value of consideration transferred:
Cash consideration to Xsens shareholders	$	57.8

Allocation of consideration:
Cash and cash equivalents	$	1.2
Inventories		0.8
Other current assets		4.6
Property, plant and equipment		0.3
Intangible assets		17.6
Goodwill		44.4
Current liabilities		(8.0	)
Deferred income taxes and other liabilities		(3.1	)

Total consideration transferred	$	57.8

The total cash flow impact of $56.6 million results from the $57.8 million cash payment offset by $1.2 million cash balance of Xsens at closing.

Identifiable intangible assets acquired and their estimated useful lives are as follows:


	Asset amount (In millions)		Weighted average useful life (In years)
Developed technology	$	11.4		3
Customer base		5.0		4
Trademarks and trade names		0.6		5

Intangible assets subject to amortization	$	17.0

In-process research and development		0.6

Total intangible assets	$	17.6

The developed technology intangible assets are being amortized on a technology-by-technology basis with the amortization recorded for each technology commensurate with the expected cash flows used in the initial determination of fair value. In-process research and development (IPR&D) is capitalized until such time the related projects are completed or abandoned at which time the capitalized amounts will begin to be amortized or written off. Xsens IPR&D is being amortized in a manner consistent with the cash flows used in determining fair value. Customer base assets consist of Xsens customer relations and customer loyalty related to its end-customer relationships. Customer base is being amortized in a manner consistent with the cash flows used in determining fair value. Trade names include Xsens corporate name. Trade names are considered to be finite-lived assets and are being amortized using the straight-line method, which we believe is materially consistent with the pattern of benefit to be realized by the asset.

Amortization expense associated with acquired intangible assets was approximately $3.1 million, for the year ended December 28, 2014.

The remaining consideration, after adjusting for identifiable intangible assets and the net assets and liabilities recorded at fair value, was $44.4 million and was recorded as goodwill. This goodwill is attributed to Xsens’s product portfolio and workforce expertise. None of the goodwill related to the Xsens acquisition is deductible for tax purposes.