Acquisitions | 2. ACQUISITIONS Acquisition of FiBest Limited— We recognized the FiBest assets acquired and liabilities assumed based upon the fair value of such assets and liabilities measured as of the date of acquisition. The aggregate purchase price for FiBest is being allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the purchase price over the fair value of the acquired net assets represents cost and revenue synergies specific to the Company, as well as non-capitalizable intangible assets, such as the employee workforce acquired, and has been allocated to goodwill, none of which will be tax deductible. We expect to finalize our allocation of purchase price during calendar year 2016. The preliminary allocation of purchase price as of April 1, 2016, is as follows (in thousands): Six Months 2016 Preliminary Current assets $ 10,850 Intangible assets 45,650 Other assets 3,334 Total assets acquired 59,834 Liabilities assumed: Debt 11,627 Deferred income taxes 12,932 Other liabilities 3,968 Total liabilities assumed 28,527 Net assets acquired 31,307 Consideration: Cash paid upon closing, net of cash acquired 47,517 Goodwill $ 16,210 The components of the acquired intangible assets on a preliminary basis were as follows (in thousands): Amount Useful Lives Developed technology $ 9,400 7 Customer relationships 36,250 10 $ 45,650 The overall weighted-average life of the identified intangible assets acquired in the FiBest Acquisition is estimated to be 9.4 years and the assets are being amortized over their estimated useful lives based upon the pattern over which we expect to receive the economic benefit from these assets. The purchase accounting is preliminary and subject to completion including the areas of taxation and certain fair value measurements, particularly the finalization of the valuation assessment of the acquired tangible and intangible assets. The adjustments arising from the completion of the outstanding matters may materially affect the preliminary purchase accounting. The following is a summary of FiBest revenue and earnings included in MACOM’s accompanying condensed consolidated statements of operations for the three and six months ended months ended April 1, 2016 (in thousands): Three Months Six Months Revenue $ 8,435 $ 11,105 Loss before income taxes (1,747 ) (2,558 ) Unaudited Supplemental Pro Forma Data— Three Months Ended Six Months Ended April 1, April 3, April 1, April 3, Revenue $ 133,579 $ 109,763 $ 256,979 $ 213,651 Net loss (11,531 ) (8,798 ) (26,785 ) (19,115 ) Acquisition of Aeroflex/Metelics Inc.— We recognized the Metelics assets acquired and liabilities assumed based upon the fair value of such assets and liabilities measured as of the date of acquisition. The aggregate purchase price for Metelics is being allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the purchase price over the fair value of the acquired net assets represents cost and revenue synergies specific to the Company, as well as non-capitalizable intangible assets, such as the employee workforce acquired, and has been allocated to goodwill, which will be tax deductible due to a 338(h)(10) election. We expect to finalize our allocation of purchase price during calendar year 2016. The adjusted allocation of purchase price as of April 1, 2016, is as follows (in thousands): Preliminary Allocation Adjusted Current assets $ 15,250 $ (1,835 ) 13,415 Intangible assets 19,700 — 19,700 Other assets 6,249 — 6,249 Total assets acquired 41,199 (1,835 ) 39,364 Liabilities assumed: Other liabilities 7,401 — 7,401 Total liabilities assumed 7,401 — 7,401 Net assets acquired 33,798 (1,835 ) 31,963 Consideration: Cash paid upon closing, net of cash acquired 38,000 — 38,000 Goodwill $ 4,202 $ 1,835 $ 6,037 The components of the acquired intangible assets on a preliminary basis were as follows (in thousands): Amount Useful Lives Developed technology $ 1,000 7 Customer relationships 18,700 10 $ 19,700 The overall weighted-average life of the identified intangible assets acquired in the Metelics Acquisition is estimated to be 9.8 years and the assets are being amortized over their estimated useful lives based upon the pattern over which we expect to receive the economic benefit from these assets. During the quarter ended April 1, 2016, we recorded an adjustment of $1.8 million primarily associated with inventory which reduced current assets acquired. The purchase accounting is preliminary and subject to completion including certain fair value measurements, particularly the finalization of the valuation assessment of the acquired tangible and intangible assets. The adjustments arising from the completion of the outstanding matters may materially affect the preliminary purchase accounting. The following is a summary of Metelics revenue and earnings included in our accompanying condensed consolidated statements of operations for the three and six months ended April 1, 2016 (in thousands): Three Months Six Months Revenue $ 10,345 $ 12,252 Loss before income taxes (220 ) (174 ) Unaudited Supplemental Pro Forma Data Three Months Ended Six Months Ended April 1, April 3, April 1, April 3, Revenue $ 133,579 $ 112,009 $ 258,189 $ 219,392 Net loss (10,119 ) (7,995 ) (25,703 ) (15,748 ) Acquisition of BinOptics Corporation The BinOptics Acquisition was accounted for as a stock purchase and the operations of BinOptics have been included in our consolidated financial statements since the date of acquisition. We have recognized BinOptics’ assets acquired and liabilities assumed based upon the fair value of such assets and liabilities measured as of the date of acquisition. The aggregate purchase price for BinOptics has been allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the purchase price over the fair value of the acquired net assets represents cost and revenue synergies specific to the Company, as well as non-capitalizable intangible assets, such as the employee workforce acquired, and has been allocated to goodwill, none of which is tax deductible. We finalized our allocation of purchase price during the first quarter of fiscal year 2016. The final allocation of purchase price as of January 1, 2016, is as follows (in thousands): October 2, 2015 Allocation January 1, 2016 Current assets $ 23,674 $ (1,100 ) $ 22,574 Intangible assets 136,900 400 137,300 Other assets 9,194 — 9,194 Total assets acquired 169,768 (700 ) 169,068 Liabilities assumed: Debt 2,535 — 2,535 Deferred income taxes 33,345 99 33,444 Other liabilities 13,106 — 13,106 Total liabilities assumed 48,986 99 49,085 Net assets acquired 120,782 (799 ) 119,983 Consideration: Cash paid upon closing, net of cash acquired 208,352 — 208,352 Goodwill $ 87,570 $ 799 $ 88,369 The components of the acquired intangible assets were as follows (in thousands): Amount Useful Lives Developed technology $ 17,500 7 Customer relationships 119,800 10 $ 137,300 The overall weighted-average life of the identified intangible assets acquired in the BinOptics Acquisition is estimated to be 9.6 years and the assets are being amortized over their estimated useful lives based upon the pattern over which we expect to receive the economic benefit from these assets. Unaudited Supplemental Pro Forma Data— Three Months Six Months April 3, 2015 April 3, 2015 Revenue $ 104,387 $ 237,966 Net loss (11,387 ) (14,750 ) |