Acquisitions and Divestitures

Vistapointe, Inc.

On September 11, 2014, the Company completed its acquisition of the assets of Vistapointe, Inc. (“Vistapointe”), a privately held developer of network visibility and analytics solutions with facilities located in San Ramon, California and Bangalore, India, and certain assets of its related entities. Vistapointe has taken a leadership role in developing software-based, carrier-grade Network Visibility and Analytics (“NVA”) solutions for mobile network operators who are embracing Network Functions Virtualization (“NFV”) and software-defined networking (“SDN”) architectures. This acquisition enhances Brocade’s leadership in NFV technology and gives Brocade a new market to address with visibility and analytics solutions for mobile operators.

The results of operations of Vistapointe are included in the Company’s Consolidated Statement of Income from the date of the acquisition. The Company does not consider the acquisition of Vistapointe to be material to its results of operations or financial position, and therefore, Brocade is not presenting pro-forma financial information of combined operations.

The total purchase price was $16.9 million, consisting entirely of cash consideration. In addition, the Company paid direct acquisition costs of $0.4 million.

In connection with this acquisition, the Company allocated the total purchase consideration to the net assets and liabilities acquired, including identifiable intangible assets, based on their respective fair values at the acquisition date. The total weighted-average amortization period for finite-lived intangible assets is five years. The following table summarizes the allocation of the purchase price to the fair value of the assets and liabilities acquired (in thousands):



Assets acquired:
Identifiable intangible assets:
In-process technology	$	2,850
Developed technology	1,710
Trade name	130
Total identifiable intangible assets	4,690
Goodwill	11,475
Property and equipment, net	735
Net assets acquired	$	16,900

Vyatta, Inc.

On November 9, 2012, the Company completed its acquisition of Vyatta, Inc. (“Vyatta”), a privately held developer of a software-based network operating system suite headquartered in Belmont, California. Vyatta became a wholly owned subsidiary of the Company as a result of the acquisition. The Vyatta operating system suite is deployed on conventional computer hardware platforms for multiple applications in network virtualization, SDN, NFV, and other private/public cloud computing platforms. This acquisition complements Brocade’s investments in Internet Protocol (“IP”) switches and router products and enables Brocade to pursue new market opportunities in data center virtualization, including public cloud, virtual private cloud, and managed services.

The results of operations of Vyatta are included in the Company’s Consolidated Statement of Income from the date of the acquisition. The Company does not consider the acquisition of Vyatta to be material to its results of operations or financial position, and therefore, Brocade is not presenting pro-forma financial information of combined operations.

The total purchase price was $44.8 million, consisting of $43.6 million cash consideration and $1.2 million related to prepaid license fees paid by the Company to Vyatta that was effectively settled at the recorded amount as a result of the acquisition. Of the cash consideration, $7.0 million was held in escrow for a period of 18 months from the closing of the acquisition and was subsequently released in the third quarter of fiscal year 2014. In addition, the Company paid direct acquisition costs of $0.4 million.

Divestitures

On January 17, 2014, the Company completed the sale of its network adapter business to QLogic Corporation, as part of the Company’s business strategy to focus development on a portfolio of high performance networking products and services—both hardware and software-based—that meet the demands of today’s data centers whether virtualized or cloud based.

The net carrying amount of the network adapter business’ assets and liabilities at the time of the divestiture was $5.1 million, comprised primarily of associated goodwill of $4.1 million. The sale resulted in a gain of $4.9 million, which is presented in the Company’s Consolidated Statements of Income as “Gain on sale of network adapter business.”