Acquisition of Chingis (Chingis)

12 Months Ended

Sep. 30, 2013

Chingis

Business Acquisition [Line Items]

Acquisition of Chingis

Acquisition of Chingis

On September 14, 2012, the Company acquired approximately 94.1% of Chingis Technology Corporation (Chingis) a company headquartered in Taiwan. Chingis provides a variety of NOR flash memory technologies used in standalone and embedded applications. The Company’s goal with this acquisition is to strengthen its specialty memory product portfolio by adding another specialty memory technology to expand the Company's future growth opportunities. In addition, the Company expects to leverage existing customer and vendor relationships to promote Chingis’s products.

The purchase price was approximately $31.8 million, or $13.2 million net of the approximately $18.6 million in cash on Chingis' balance sheet at closing.

The allocation of the purchase price of Chingis includes both tangible assets and acquired intangible assets. The excess of the purchase price over the fair value allocated to the net assets is goodwill. The goodwill recognized was attributable primarily to expected synergies and the assembled workforce of Chingis. The Company currently does not expect to receive a tax benefit for such goodwill.

The purchase price allocation is as follows (in thousands):

Cash and cash equivalents	$	18,622
Accounts receivable	6,546
Inventories	5,229
Property, equipment and leasehold improvements	117
Other current and other assets	844
Intangible assets:
In-process technology	400
Developed technology	3,690
Customer relationships	3,340
Other intangibles	450
Total identifiable assets acquired	39,238
Current liabilities and other liabilities	(7,946		)
Deferred tax liability	(1,440		)
Total liabilities assumed	(9,386		)
Net identifiable assets acquired	29,852
Noncontrolling interest	(1,996		)
Goodwill	3,976
Net assets acquired	$	31,832

The noncontrolling interest was determined based on the acquisition date fair value and the minority shareholders' ownership percentage.

The developed technology is being amortized over six years, the customer relationships are being amortized over six years and the other intangible assets are being amortized over three years.

In fiscal 2012, the Company incurred costs of $0.4 million related to its acquisition of Chingis. These costs are recorded in selling, general and administrative expenses in the Company’s consolidated statements of operations. The Company's financial results for fiscal 2012, include revenue of $1.2 million and a net loss of $1.2 million attributable to Chingis for the period from September 14, 2012 through September 30, 2012.

In May 2013, the Company acquired an additional 4.8% of Chingis for approximately $1.6 million. At September 30, 2013, the Company owned approximately 98.9% of Chingis.

Unaudited Pro forma Financial Information

The pro forma financial information presented below is presented as if the acquisition of Chingis had occurred at the beginning of fiscal 2011. The pro forma statements of operations for the twelve months ended September 30, 2013, 2012 and 2011, include the historical results of the Company and Chingis plus the effect of recurring amortization of the related intangible assets. Such pro forma results do not purport to be indicative of what would have occurred had the acquisition been made as of those dates or the results which may occur in the future. The pro forma financial results are as follows:

	Years Ended September 30,
	2013		2012			2011
	(in thousands, except per share data)
Net sales	$	307,570	$	303,299		$	320,516
Net income	$	17,852	$	(2,259	)	$	57,608