NOTE B – ACQUISITIONS

In June 2013, the Company acquired 100% of the voting equity interest of Layer 7 Technologies (Layer 7), a provider of application programming interface (API) management and security software. The acquisition of Layer 7 will enable the Company to provide security and management technology to the API marketplace that complements its current identity and access management software suite. The total purchase price of the Layer 7 acquisition was approximately $155 million.

The pro forma effects of the Company’s first quarter fiscal year 2014 acquisition of Layer 7 on the Company’s revenues and results of operations during fiscal year 2013 were considered immaterial. The preliminary purchase price allocation as of December 31, 2013 is as follows:



(dollars in millions)	Layer 7			Estimated Useful Life
Finite-lived intangible assets ⁽¹⁾	$	26		2-4 years
Purchased software	87			5 years
Goodwill	55			Indefinite
Deferred tax liabilities	(13		)	—
Other assets net of other liabilities assumed ⁽²⁾	—			—
Purchase price	$	155


(1)	Includes customer relationships and trade names.


(2)	Includes approximately $9 million of cash acquired.

Revisions to the purchase price allocation made since the date of acquisition were to account for changes in our fair value analysis and deferred taxes. The revisions to the purchase price allocation were not material to the Company's financial statements for the third quarter and first nine months of fiscal year 2014. Transaction costs for the acquisition were immaterial. The excess purchase price over the estimated value of the net tangible and identifiable intangible assets was recorded to goodwill. The preliminary allocation of a significant portion of the purchase price to goodwill was predominantly due to synergies the Company expects from marketing and integration of the Layer 7 products with other products of the Company and intangible assets that are not separable, such as assembled workforce and going concern. The goodwill relating to the Company’s acquisition of Layer 7 is not deductible for tax purposes and was allocated to the Enterprise Solutions segment. The allocation of purchase price to acquired identifiable assets, including intangible assets, is preliminary because the Company has not completed its fair value analysis and review of historical tax records of Layer 7.

The Company had approximately $33 million and $14 million of accrued acquisition-related costs at December 31, 2013 and March 31, 2013, respectively, related to purchase price amounts withheld to support indemnification obligations by the sellers.