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Subsequent Event - Sale of TPack A/S
12 Months Ended
Mar. 31, 2013
Subsequent Events [Abstract]  
Subsequent Event - Sale of TPack A/S
Subsequent Event - Sale of TPack A/S (Unaudited)
On April 12, 2013, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Altera European Trading Company Limited (the “Buyer”), a private limited company organized under the laws of Ireland and a wholly-owned subsidiary of Altera Corporation (“Altera”), and AppliedMicro TPACK A/S (“TPack”), a limited liability company organized under the laws of Denmark and a wholly-owned subsidiary of the Company. Pursuant to the Purchase Agreement, the Company is selling 100% of the issued and outstanding shares of TPack and certain specified intellectual property assets owned by the Company related to TPack's business for a total purchase price of $34 million, entirely in cash. The purchase price was subject to an adjustment based on TPack's working capital balance as of the closing of the transaction.
On April 22, 2013, the Company completed the sale of TPack and certain specified intellectual property assets owned by the Company related to TPack's business for an aggregate consideration of $33.5 million, payable in cash, which reflects the $34.0 million base purchase price as adjusted for the working capital adjustment mechanism set forth in the Purchase Agreement, and remains subject to a potential final, non-material post-closing adjustments. In connection with the closing, the Company received a cash payment of $30.2 million. The remaining cash payment of $3.3 million of the aggregate consideration will be held by the in escrow until March 31, 2014 to secure the Company's indemnification obligations subject to and in accordance with the terms of the Purchase Agreement. The distribution of this holdback amount is subject to any indemnification claims that the Buyer may have under the terms of the Purchase Agreement and final resolution of any such claims.
As a result of the transactions contemplated by the Purchase Agreement, employees employed by TPack will remain TPack employees and be transferred along with the sale of the TPack shares. Pursuant to the terms of the Purchase Agreement, the Company, TPack and the Buyer entered into ancillary agreements, including an Intellectual Property Agreement. The Intellectual Property Agreement provides that the Company will receive a fully-paid perpetual license to substantially all of TPack's intellectual property rights being acquired by the Buyer in the transaction, and the Company and the Buyer will license to each other certain intellectual property rights specified in the Intellectual Property Agreement.
In connection with entering into the Purchase Agreement, the Company and Altera entered into a memorandum of understanding dated April 11, 2013 intended to result in their joint development and marketing of optimized solutions for data center applications.