Acquisitions and Intangible Assets

6 Months Ended

Jul. 02, 2011

Acquisitions and Intangible Assets [Abstract]

Acquisitions and Intangible Assets

Note 8 — Acquisitions and Intangible Assets

     During the first quarter of 2011, we acquired the assets and liabilities of Aretê Sistemas S.A. (“Aretê”) in Spain, which further strengthens our capabilities in value-added distribution in our EMEA region. Our agreement with Aretê called for an initial cash payment of $1,066, a hold-back amount of $1,040, which was released during the second quarter upon settlement of certain closing matters, and a maximum potential earn-out of $5,000 to be paid out over four years through December 31, 2014 based upon the achievement of certain pre-defined targets. We have recorded the earn-out at $2,062, which reflects the estimated fair value of the payout to be achieved. The aggregate purchase price of $4,168 has been allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction dates, including identifiable intangible assets of $4,142, primarily related to vendor and customer relationships with estimated useful lives of 10 years. This acquisition is not material to us as a whole and therefore, pro forma financial information has not been presented.

     During the second quarter of 2010, we acquired all of the outstanding shares of Albora Soluciones in our EMEA region and the assets and liabilities of Asiasoft Hong Kong Limited in our Asia-Pacific region. These acquisitions further strengthen our capabilities in virtualization, security and middleware solutions and enterprise computing. These entities were acquired for an aggregate cash price of $4,933, which was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction dates, resulting in identifiable intangible assets of $2,921, primarily related to vendor and customer relationships with estimated useful lives of 10 years and deferred tax liabilities of $779 related to the intangible assets, none of which are deductible for income tax purposes.

     The gross carrying amounts of finite-lived identifiable intangible assets of $185,150 and $179,267 at July 2, 2011 and January 1, 2011, respectively, are amortized over their remaining estimated lives ranging up to 17 years. The net carrying amount was $81,177 and $81,992 at July 2, 2011 and January 1, 2011, respectively. Amortization expense was $3,250 and $4,303 for the thirteen weeks ended July 2, 2011 and July 3, 2010, respectively, and $6,455 and $8,646 for the twenty-six weeks ended July 2, 2011 and July 3, 2010, respectively.