Acquisitions

12 Months Ended

Dec. 28, 2019

Business Combinations [Abstract]

ACQUISITIONS

ACQUISITIONS

During fiscal 2017, Cadence completed two business combinations for total cash consideration of $142.8 million, after taking into account cash acquired of $4.2 million. The total purchase consideration was allocated to the assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition dates. Cadence recorded a total of $76.4 million of acquired intangible assets (of which $71.5 million represented in-process technology), $90.2 million of goodwill and $19.6 million of net liabilities consisting primarily of deferred tax liabilities. Cadence will make payments to certain employees, subject to continued employment, through the fourth quarter of fiscal 2020.

A trust for the benefit of the children of Lip-Bu Tan, Cadence’s Chief Executive Officer (“CEO”) and director, owned less than 3% of nusemi inc, one of the companies acquired in 2017. Mr. Tan and his wife serve as co-trustees of the trust and disclaim pecuniary and economic interest in the trust. The Board of Directors of Cadence reviewed the transactions and concluded that it was in the best interests of Cadence to proceed with the transactions. Mr. Tan recused himself from the Board of Directors’ discussion of the valuation of nusemi inc and on whether to proceed with the transaction.

Acquisition-Related Transaction Costs

Transaction costs associated with acquisitions were $2.3 million, $0.6 million and $1.1 million during fiscal 2019, 2018 and 2017, respectively. These costs consist of professional fees and administrative costs and were expensed as incurred in Cadence’s consolidated income statements.