Note 2 — Acquisitions

During fiscal year 2014, the Company acquired 100% of the voting equity interest in 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 purchase price allocation as of March 31, 2014 was as follows:



(dollars in millions)	Layer 7			Estimated Useful Life
Finite-lived intangible assets ⁽¹⁾	$	26		3 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.

The allocation of purchase price to acquired identifiable assets, including intangible assets, for Layer 7 was finalized during the fourth quarter of fiscal year 2014 and resulted in revisions to the estimated fair value of purchased software and deferred taxes. These revisions were not material to the amounts previously reported and did not have a material effect on amortization expense. 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 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 was not deductible for tax purposes and was allocated to the Enterprise Solutions segment.

During fiscal year 2013, the Company acquired 100% of the voting equity interest in Nolio Ltd (Nolio), a provider of application service automation software. The total purchase price of the acquisition was approximately $42 million, which was allocated as follows: $33 million to purchased software, $10 million to goodwill, $8 million to finite-lived intangible assets and $9 million to deferred tax liabilities. The goodwill relating to the Company’s acquisition of Nolio was allocated to the Enterprise Solutions segment and was not deductible for tax purposes. Transaction costs for the acquisition were immaterial.

The Company’s other acquisitions during fiscal year 2013 were immaterial, both individually and in the aggregate. The proforma effects of the fiscal year 2013 acquisitions on the Company’s revenues and results of operations during fiscal years 2013 and 2012 were considered immaterial.

During fiscal year 2012, the Company acquired 100% of the voting equity interest of Interactive TKO, Inc. (ITKO). The total purchase price of the acquisition was approximately $315 million. The Company’s other acquisitions during fiscal year 2012 were immaterial, both individually and in the aggregate.

The Company had approximately $30 million and $14 million of accrued acquisition-related costs at March 31, 2014 and 2013, respectively, related to purchase price amounts withheld to support indemnification obligations by the sellers.