ACQUISITIONS

Acquisitions completed in fiscal year 2014

The Company completed two acquisitions during fiscal year 2014.

VOLTERRA

On October 1, 2013, the Company completed its acquisition of Volterra, formerly a publicly traded company that develops power management solutions. The primary reason for this acquisition was to expand the Company's available market across a wide range of end markets, including enterprise server, cloud computing, communications and energy. The results of operations of Volterra are included in the Company’s Consolidated Statements of Income, beginning in the second quarter of fiscal year 2014. Acquisition-related costs for the twelve months ended June 28, 2014 were $7.0 million. The Company is in the process of integrating the Volterra acquisition with the existing Communications and Automotive Solutions Group.

The total purchase price for Volterra was approximately $615 million and was comprised of:



	(in thousands)
Cash consideration for 100% of outstanding common stock of Volterra at $23 per share	$	593,250
Cash consideration for vested options settlement	21,756
Total preliminary purchase price	$	615,006

Volterra Substitute Awards

In connection with the acquisition, the Company issued substitute awards to certain Volterra employees. Refer to Note 6: “Stock-Based Compensation” of these Notes to Consolidated Financial Statements for further discussion on stock compensation in relation to Volterra.

The preliminary purchase price allocation as of the date of the acquisition is set forth in the table below and reflects various fair value estimates and analysis. These estimates were determined through established and generally accepted valuation techniques, including preliminary work performed by third-party valuation specialists, and are subject to change during the purchase price allocation period (up to one year from the acquisition date) as valuations are finalized.



	Volterra
	(in thousands)
Cash and cash equivalents and short-term investments	$	163,500
Accounts receivable	23,453
Inventories	33,339
Other tangible assets	17,151
Accrued expenses	(35,343		)
Income taxes payable	(23,241		)
Other liabilities assumed	(20,149		)
Net tangible assets	158,710
Amortizable intangible assets	226,900
IPR&D	56,200
Goodwill	174,894
Substitution of stock-based compensation awards	(1,698		)
Total purchase price	$	615,006

The Company has evaluated and continues to evaluate certain pre-acquisition contingencies, including corporate income tax related payables, uncertain tax positions and certain legal contingencies, relating to Volterra that existed as of the acquisition date. Additional information, which existed as of the acquisition date but was at that time unknown to the Company, may become known to the Company during the remainder of the purchase price allocation period.

IPR&D assets relate to future technology, is capitalized until the technology is ready for its intended use and then amortized over the technology useful life. IPR&D costs incurred by the Company subsequent to the acquisition are expensed.

Goodwill was primarily attributable to the opportunities from the addition of Volterra's product portfolio which complements the Company’s suite of products, including providing integrated process solutions to customers. The goodwill is not deductible for tax purposes.

The amortizable intangible assets are being amortized on a straight-line basis over their estimated useful lives as follows:



	Volterra acquisition
	Fair value ( in thousands)		Weighted average useful life (in years)
Intellectual property	$	192,500	4.9
Customer relationships	24,600		9.6
Trade name	6,400		4.0
Backlog	900		0.4
Patents	2,500		4.8
Total amortizable intangible assets	$	226,900

Pro forma results of operations for this acquisition have not been presented because it is not material to the Company's Consolidated Statements of Income.

Refer to Note 17: “Restructuring Activities” of these Notes to Consolidated Financial Statements for a discussion on Volterra Restructuring Plan.

OTHER ACQUISITION

The Company acquired another company during the fiscal year ended June 28, 2014, which develops low power high performance analog circuits. The total cash consideration in exchange for 100% of the outstanding shares, for this acquisition was approximately $6.1 million for which the purchase price was largely attributable to the acquired developed intellectual property. Goodwill associated with this acquisition was $0.5 million. Acquisition related costs were not material for this transaction.

Acquisitions completed in fiscal year 2013

None.

Acquisitions completed in fiscal year 2012

The purchase price allocation for acquisitions completed in fiscal year 2012 is set forth in the table below and reflects various fair value estimates and analysis, including work performed by third-party valuation specialists.

Pro forma results of operations for these acquisitions have not been presented because they are not material to Maxim Integrated's consolidated results of income, either individually or in the aggregate. Revenue and earnings per share for the acquired businesses since the date of acquisition through June 30, 2012 were not provided as they are not material. $58 million of the SensorDynamics goodwill is deductible for Austrian tax purposes over a 15 year period. The remainder of the goodwill is not deductible for tax purposes. Acquisition costs for fiscal year 2012 were not material.

Aggregate purchase price allocation for acquisitions made by Maxim Integrated during fiscal year 2012 is as follows:



	SensorDynamics			Other acquisitions			Total
	(in thousands)
Tangible assets	$	18,692		$	1,159		$	19,851
Debt assumed	(29,078		)	—			(29,078		)
Other liabilities assumed	(37,559		)	(4,729		)	(42,288		)
Net liabilities assumed	(47,945		)	(3,570		)	(51,515		)
Amortizable intangible assets	20,900			17,840			38,740
IPR&D	19,600			—			19,600
Goodwill (1)	130,594			38,392			168,986
Total purchase price (1)	$	123,149		$	52,662		$	175,811

(1) Includes $11.4 million of contingent consideration relating to the other acquisitions discussed further below.

The following table presents details of the Company's intangible assets acquired through business combinations completed during fiscal year 2012 (in thousands, except years):



	Fiscal Year 2012 Acquisitions
	SensorDynamics			Other acquisitions
	Fair value ( in thousands)		Weighted average useful life (in years)	Fair value ( in thousands)		Weighted average useful life (in years)
Intellectual property	$	16,400	7.0	$	15,340	9.2
Customer relationships	4,100		7.0	2,500		3.0
Trade name	400		3.0	—		0.0
Total amortizable intangible assets	$	20,900		$	17,840

SENSORDYNAMICS

On July 18, 2011, the Company acquired SensorDynamics, a semiconductor company that develops proprietary sensor and microelectromechanical solutions. SensorDynamics is based in Lebring, near Graz, Austria. The purpose of the acquisition was to allow the Company to combine sensors with analog products. The total cash consideration associated with the acquisition was approximately $123.1 million.

OTHER ACQUISITIONS

The Company acquired three other companies during fiscal year 2012, the biggest of which is a company that develops low power high performance analog circuits. The total cash consideration associated with the acquisition was approximately $41.3 million. The Company also recorded $11.4 million, representing the fair value of contingent consideration that would be payable in the future should certain specified project milestones be met. The contingent consideration was calculated based on probabilities that were developed regarding the likelihood that the product development milestones would be met and when the contingent payments would occur. Based on these factors, a probability weighted earnout amount was calculated and discounted (at the cost of debt) to present value.