Other Divestitures (not accounted for as discontinued operations)

Sale of Certain Assets of Audio Business

On December 13, 2013, Integrated Device Technology, Inc. and Integrated Device Technology (Malaysia) Sdn. Bhd., a wholly-owned subsidiary of IDT (collectively “IDT”), completed the sale of certain assets of its Audio business to Stravelis, Inc. for $0.2 million in cash and up to a maximum of $1.0 million additional consideration contingent upon future revenues. The Company estimates the fair value of the contingent consideration to be zero based on the estimated probability of attainment of future revenue targets. In addition, the Company recorded a $0.3 million liability for services to be provided at no charge by IDT for the first year following the acquisition date. The Company recorded a loss of $3.7 million on divestiture related to this transaction in the third quarter of fiscal 2014.

The following table summarizes the components of the loss on divestiture (in thousands):



	Amount
Cash proceeds from sale	$	200
Maximum contingent consideration	1,000
Total consideration	$	1,200

Fair value adjustment to contingent consideration	$	(1,000	)
Fair value adjustment to transitional services agreement	(300		)
Fixed assets	(135		)
Inventories	(3,051		)
Other assets	(304		)
Transaction and other costs	(126		)
Loss on divestiture	$	(3,716	)

Prior to the divestiture, this business was part of a larger cash-flow generating product group and did not, on its own, represent a separate operation of the Company and, therefore, this sale did not qualify as discontinued operations.

Sale of Certain Assets of PCI Express ("PCIe") Enterprise Flash Controller Business

On July 12, 2013, Integrated Device Technology, Inc. and Integrated Device Technology (Malaysia) Sdn. Bhd., a wholly-owned subsidiary of IDT (collectively “IDT”), completed the sale of certain assets of its PCI Express ("PCIe") enterprise flash controller business to PMC-Sierra, Inc.(“PMC”), for $96.1 million in cash.

The Company recorded a gain of $82.3 million on divestiture related to this transaction in the second quarter of fiscal 2014.

The following table summarizes the components of the gain on divestiture (in thousands):



	Amount
Cash proceeds from sale	$	96,099
Less book value of assets sold and direct costs related to the sale:
Fixed assets	(1,312		)
Inventories	(876		)
Goodwill allocation	(7,323		)
Transaction and other costs	(4,239		)
Gain on divestiture	$	82,349

Pursuant to the terms of the Asset Purchase Agreement (the "Purchase Agreement") by and among IDT and PMC, dated May 29, 2013, IDT sold (i) substantially all of the assets that were used by IDT and its subsidiaries in the business of designing, developing, manufacturing, testing, marketing, supporting, maintaining, distributing, provisioning and selling non-volatile memory (flash) controllers and (ii) all technology and intellectual property rights owned by IDT or any of its subsidiaries and used exclusively in, or developed exclusively for use in, (a) switching circuits having the primary function of flexible routing of data from/to multiple switch interface ports, where all switch interface ports conform to the PCIe protocol, or (b) circuits having the primary function of executing all of the capturing, re-timing, re-generating and re-transmitting PCIe signals to help extend the physical reach of the signals in a system (the “Disposition”).

In connection with the closing of the Disposition, a license agreement was entered into by IDT and a subsidiary of PMC simultaneously with the Purchase Agreement, whereby IDT will license certain intellectual property rights and technology to PMC, and PMC will license back to IDT certain of the intellectual property rights and technology acquired by PMC in the Disposition.

In connection with the closing of the Disposition, IDT and PMC also entered into (a) a transition services agreement and (b) a five year supply agreement, whereby IDT will supply wafers for certain products to PMC.

Prior to the divestiture, the operating results for IDTs PCIe flash controller business were included in the Company's Computing and Consumer reportable segment. The PCIe enterprise flash controller business was part of a larger cash-flow generating product group and did not, on its own, represent a separate operation of the Company and, therefore, this sale did not qualify as discontinued operations for reporting purposes.

Sale of Smart Meter Business

On March 7, 2013, the Company completed the sale of its smart metering business and related assets to Atmel Corporation for $10.3 million in cash, of which $1.0 million was held in an escrow account for a period of one year and was received in full in fiscal 2014. In the fourth quarter of fiscal 2013, the Company recorded a gain of $8.0 million related to this divestiture. Prior to the divestiture, the smart meter business was part of a larger cash-flow generating product group and did not, on its own, represent a separate operation of the Company and, therefore, this sale did not qualify as discontinued operations. The following table summarizes the components of the gain on divestiture (in thousands):



	Amount
Cash proceeds from sale	$	10,264
Less book value of assets sold and direct costs related to the sale:
Fixed assets	(22		)
Inventories	(1,299		)
Transaction and other costs	(957		)
Gain on divestiture	$	7,986

Wafer fabrication facility

On January 31, 2012, the Company completed the sale of a wafer fabrication facility located in Hillsboro, Oregon and related assets and specific liabilities to Jireh Semiconductor Incorporated, an Oregon corporation and wholly-owned subsidiary of Alpha and Omega Semiconductor Limited (AOS) for $26.3 million in cash, of which $5.0 million was received as a purchase option deposit in fiscal 2011. The following table summarizes the components of the gain on divestiture (in thousands):



	Amount
Cash proceeds from sale	$	26,330
Assets sold:
Fixed assets, net	(3,131		)
Other assets	(1,362		)
Liabilities transferred	476
Transaction and other costs	(1,657		)
Gain on divestiture	$	20,656