ACQUISITION

On June 23, 2015, the Company completed the acquisition of Orad Hi-Tech Systems Ltd. (“Orad”), an Israeli company previously listed on the Frankfurt Stock Exchange. Each issued and outstanding share of Orad common stock was canceled and converted into the right to receive consideration equal to €5.67 in cash, representing total consideration paid of $66.0 million based on the exchange rate on the date of closing, net of estimated cash acquired. As a result of the acquisition, the Company incurred merger and integration cost of $5.7 million, which was recorded as general and administrative expenses in the Company’s statement of operations. Orad provides 3D real-time graphics, video servers and related asset management solutions. The acquisition adds applications to Avid’s Studio Suite which the Company intends to connect to the Avid MediaCentral Platform.

The following table summarizes the purchase price allocation to the fair value of the assets acquired and liabilities assumed at the date of acquisition (in thousands).



Cash	$	7,477
Accounts receivable, net	6,625
Inventories	3,128
Other current assets	1,217
Property and equipment	1,338
Identifiable intangible assets	37,200
Other assets	3,187
Goodwill	32,643
Total assets acquired	92,815

Accounts payable	(1,395		)
Accrued expenses and other current liabilities	(7,769		)
Deferred revenue and deposits	(2,714		)
Deferred tax liabilities, net	(3,554		)
Other long-term liabilities	(3,939		)
Total liabilities assumed	(19,371		)
Net assets acquired	$	73,444

The purchase price allocation resulted in goodwill of $32.6 million, which is not deductible for tax purposes. The goodwill is attributable to expected synergies from combining the operations of Orad with the Company and intangible assets that do not qualify for separate recognition, such as an assembled workforce. The following table presents the identifiable intangible assets acquired and their respective weighted average useful lives (dollars in thousands):



	Weighted Average Life (Years)	Amount
Core and completed technology	4	$	31,200
Customer relationships	4	5,800
Trade name	1	200
Total		$	37,200

The estimated fair value of intangible assets was determined using the excess earnings method for technology, replacement cost method for customer relationships and relief from royalty method for trade name.

Pro Forma Financial Information for Acquisition of Orad (in thousands except per share data, unaudited)

The results of operations of Orad have been included in the results of operations of the Company since June 23, 2015, the date of acquisition. The net revenues and net loss for Orad, which are included in the Company’s consolidated statements of operations from the date of acquisition, were $13.1 million and $8.5 million, respectively, for the year ended December 31, 2015. The following unaudited pro forma financial information presents the Company’s results of operations for the years ended December 31, 2015 and 2014 as if the acquisition of Orad had occurred at the beginning of 2014. The pro forma financial information for the combined entities has been prepared for comparative purposes only and is not indicative of what actual results would have been if the acquisition had taken place at the beginning of fiscal 2014, or of future results.



	Year Ended December 31,
	2015			2014
Net revenues	$	520,918		$	570,766

Net (loss) income	(2,300		)	8,638

Net (loss) income per share:
Basic	$	(0.06	)	$	0.22
Diluted	$	(0.06	)	$	0.22