Business Combinations

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Business Combinations

Business Combinations

On April 1, 2016, the Company acquired the remaining ownership interest in BTI Systems Inc. (“BTI”), increasing its ownership from 12% to 100%, for $26.1 million of cash. BTI is a privately-held provider of cloud and metro networking systems and software to content, cloud, and service providers. The Company acquired BTI on the expectation that this would accelerate the delivery of open and automated packet optical transport solutions with integrated network management based on BTI Systems' proNX Service Manager and Juniper's Connectivity Services Director, as well as the NorthStar Controller.

Prior to the acquisition, the Company had a pre-existing investment in BTI's equity and remeasured the investment to its fair value of $17.1 million, which was based upon adjustments market participants would consider when estimating the fair value. The Company also held $0.9 million of convertible debt measured at fair value and settled upon acquisition.

The aggregate value of $44.1 million, consisting of cash consideration of $26.1 million and $18.0 million for the fair value of the previous investments in BTI was allocated as follows (in millions):

Net tangible liabilities assumed	$	(19.5	)
Intangible assets acquired	43.3
Goodwill	20.3
Total	$	44.1

The goodwill recognized for the acquisition of BTI was primarily attributable to expected synergies and is not deductible for U.S. federal income tax purposes. Upon acquisition, the Company also repaid $18.6 million of certain outstanding BTI liabilities assumed.

Additionally, under the terms of the acquisition agreement, the Company assumed share-based awards for employees with a fair value of $8.6 million, which were granted in contemplation of future services and will be expensed as share-based compensation over the remaining service period.

The Company's Condensed Consolidated Financial Statements include the operating results of this business combination from the date of acquisition. Pro forma results of operations for this acquisition have not been presented as the financial impact to the Company's consolidated results of operations is not material.

The Company recognized $1.3 million and $4.2 million of acquisition-related costs during the three and six months ended June 30, 2016, respectively. These acquisition-related costs were expensed in the period incurred within general and administrative expense in the Company's Condensed Consolidated Statements of Operations. There were no such charges during the three and six months ended June 30, 2015.

The Company also recorded $2.4 million of restructuring charges during the three and six months ended June 30, 2016, related to severance costs for certain former BTI employees which were recorded in restructuring charges (benefit) in the Condensed Consolidated Statements of Operations.

Intangible Assets Acquired

The following table presents details of the Company's intangible assets acquired through the business combination completed during the three months and six months ended June 30, 2016 (in millions, except years):

	Weighted Average Estimated Useful Life (In Years)	Amount
Existing technology	8	$	37.1
Customer relationships	8	5.3
Trade name	1	0.6
Backlog	1	0.3
Total		$	43.3

Additional information, such as income tax and other contingencies, existing as of the acquisition date but unknown to the Company may become known during the remainder of the measurement period, not to exceed 12 months from the acquisition date, which may result in changes to the amounts and allocations recorded.