BUSINESS COMBINATIONS

9 Months Ended

Sep. 30, 2015

Business Combinations [Abstract]

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS

Newport Media, Inc.

On July 31, 2014, the Company acquired 100% of the equity interest in privately-held Newport Media, Inc. (“NMI”), a provider of low power Wi-Fi and Bluetooth solutions that are expected to enhance the Company’s portfolio of wireless products.

The purchase consideration, net of cash acquired, consisted of $139.6 million payable in cash at the closing of the acquisition, subject to working capital adjustments and deductions for specified closing expenses. In addition, the acquisition agreement provides for an aggregate cash earn-out payment of up to $30.0 million payable if specified revenue targets are achieved over the two years following the acquisition date. The Company recorded a liability of $0.4 million as of July 31, 2014, representing the estimated fair value of the earn-out based on the probability of achievement as of the acquisition date.

During the nine months endedSeptember 30, 2015, the Company reversed $0.2 million previously accrued in respect of the potential earn-out through a credit to acquisition-related charges in the Condensed Consolidated Statements of Operations as management determined that revenue targets on which the earn-out is based will not likely be met during 2015.

The Company prepared an initial determination of the fair value of the assets acquired and liabilities assumed as of the acquisition date using preliminary information.  The Company recognized measurement period adjustments made during the fourth quarter of 2014 to the fair value of certain assets acquired and liabilities assumed as a result of further refinements in the Company’s estimates.  These adjustments were retrospectively applied to the July 31, 2014 acquisition date balance sheet.  The effect of these adjustments on the preliminary purchase price allocation was a decrease in goodwill and income tax payable of $1.9 millionand $0.3 million, respectively, and an increase in deferred tax assets of $1.6 million. 

The excess of the fair value of consideration paid over the fair value of the net assets and the identifiable intangible assets acquired and the liabilities assumed resulted in recognition of goodwill of approximately $86.1 million, including workforce, of which $55.2 million is expected to be deductible for tax purposes. The recognition of goodwill primarily related to the expected synergies between the product offerings of NMI and the Company. All goodwill recorded was assigned to the Company's Microcontroller segment.

The Company expensed $2.5 million of advisory, legal, and consulting fees and other costs directly related to the acquisition, which were recorded as acquisition-related charges in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2014. The Company incurred $5.3 million of one-time bonus expense, subject to claw-back and other employment-related terms, for certain employees, which are being recorded ratably through the date on which the bonus is no longer recoverable by the Company. For the three and nine months endedSeptember 30, 2015, the Company recorded $0.2 million and $3.1 million, respectively, of one-time bonus expense as acquisition-related charges and $1.0 million and $4.0 million, respectively, of amortization expense related to identifiable intangible assets in the Condensed Consolidated Statements of Operations.