Business Combination

6 Months Ended

Sep. 28, 2019

In July 2019, the Company completed the acquisition of Solarflare by acquiring all of its outstanding ordinary shares. Solarflare is a leading provider of high-performance, low latency networking solutions for customers spanning FinTech to cloud computing. This acquisition enables the Company to combine its industry leading solutions with Solarflare's ultra-low latency network interface card (NIC) technology and onload application acceleration software, to enable new converged SmartNIC solutions.

Total purchase consideration to acquire Solarflare was approximately $400.0 million, including $8.4 million of fair value from the Company's preexisting investment in Solarflare and net of $6.8 million of cash acquired. The Company incurred $4.2 million of acquisition related costs, which was recorded as operating expenses in the Company's condensed consolidated statements of income. Additionally, the Company was required to assess the fair value of its preexisting investment in Solarflare and, as a result, recorded an immaterial gain in its condensed consolidated statements of income as part of interest and other income, net.

The Company allocated the purchase price to tangible and identified intangible assets acquired and liabilities assumed based on estimated fair values. As additional information becomes available, such as the finalization of the estimated fair value of tax-related items, the Company may further update the preliminary purchase price allocation during the remainder of the measurement period (up to one year from the acquisition date). The preliminary fair values of the assets acquired and liabilities assumed in the acquisition of Solarflare, by major class, were recognized as follows:



	Amount
	(In thousands)
Cash and cash equivalents	$	6,765
Tangible assets	19,631
Deferred tax assets	44,016
Identifiable intangible assets	106,000
Goodwill	239,197
Current liabilities	(10,624		)
Non-current liabilities	(4,238		)
Total	$	400,747

The goodwill of $239.2 million arising from the acquisition is attributed to the expected synergies and other benefits that will be generated from the combination of the Company and Solarflare. The goodwill recognized is not deductible for tax purposes.

The identified intangible assets assumed in the acquisition of Solarflare were recognized as follows, based upon the preliminary fair values as of the closing date of the acquisition.



	Amount		Amortization Life
	(In thousands)
Trade names & trademarks	$	2,000	2.0 years
Developed technology	34,000		5.0 years
Customer relationships	40,000		5.0 years
In-process research and development	30,000		N/A
Total identifiable intangible assets	$	106,000