Business Combination

12 Months Ended

Mar. 28, 2020

Business Combination Disclosure [Text Block]

Business Combinations

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 its 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 consolidated statements of income as part of interest and other income (expense), net.

Subsequent to the acquisition, the financial results for Solarflare are included in the Company's consolidated financial statements. Prior to the acquisition, the financial results for Solarflare were not significant for pro forma financial information.

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	19,308
Identifiable intangible assets	106,000
Goodwill	237,163
Deferred tax assets	44,016
Current liabilities	(9,229		)
Non-current liabilities	(3,797		)
Total	$	400,226

The goodwill of $237.2 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

During fiscal 2020, the Company acquired Airrays GmbH, a German-based company that develops a game-changing radio antenna technology in mobile communications for approximately $29.0 million . This acquisition is part of the Company’s wireless strategy to build end-to-end radio reference designs, allowing the Company to maximize the value in its RFSoC technology. The Company recognized $14.1 million of goodwill and $18.2 million of acquisition-related intangibles from this acquisition.

During fiscal 2020, the Company acquired NGCodec, Inc., a leader in cloud video business for approximately $54.0 million. This acquisition accelerates the Company's strategic roadmap to help advance the key verticals within the data center. The Company recognized $28.9 million of goodwill and $26.7 million of acquisition-related intangibles from this acquisition.

The COVID-19 pandemic did not have any impact on the integrations of the Solarflare and other acquisitions as the integrations were completed by mid-February 2020, before the social distancing requirements were in place and the Company mandated its employees to work from home starting in mid-March 2020.