Business Combinations

9 Months Ended

Sep. 30, 2011

Business Combinations [Abstract]

BUSINESS COMBINATIONS

2. BUSINESS COMBINATIONS

On August 4, 2011, we acquired all of the outstanding stock of Bluesocket, Inc., a provider of wireless network solutions with virtual control, for $23.8 million in cash. The acquisition provides us with IEEE802.11N enterprise class wireless LAN expertise, technology, and products to address the growing transition within small-medium enterprises and large enterprises to wireless networks and mobile devices. We have included the financial results of Bluesocket in our consolidated financial statements since the date of acquisition. Pro forma results of operations for the acquisition have not been presented because the effect of the acquisition was not material to our financial results. The preliminary allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date is as follows:

(In Thousands)
Cash	$	1,027
Accounts receivable		297
Inventory		792
Prepaid expenses		357
Property, plant and equipment		173
Deferred tax assets, net		11,411
Accounts payable		(441	)
Unearned revenue		(600	)
Accrued expenses		(332	)
Net assets acquired		12,684
Customer relationships		1,700
Developed technology		3,590
Intellectual property		1,070
Trade names		300
Goodwill		4,445
Total purchase price	$	23,789

The net deferred tax assets acquired are primarily related to net operating losses and previously capitalized and unamortized research and development expense for tax deduction purposes.

The fair value of the customer relationships, developed technology and intellectual property acquired was calculated using an income approach (excess earnings method) and is being amortized using the straight-line method. The customer relationships and intellectual property are being amortized over an estimated useful life of 7 years and the developed technology is being amortized over an average estimated useful life of 4.5 years.

The fair value of the trade names acquired was calculated using an income approach (relief from royalty method) and is being amortized using the straight-line method over the estimate useful life of 4.5 years.

The goodwill of $4.4 million generated from this acquisition is primarily related to expected synergies and was assigned to our Enterprise Networks division. We are evaluating the tax treatment options associated with this transaction. Currently, we do not believe any of the goodwill will be deductible for U.S. federal income tax purposes.

During the three months ended September 30, 2011, we incurred acquisition related expenses and amortization of acquired intangibles of $1.0 million related to this acquisition.