Merger with Conexant Holdings, Inc. (Tables)

9 Months Ended

Jun. 29, 2012

Merger with Conexant Holdings, Inc. [Abstract]

Fair value assigned to the assets acquired and liabilities

Total merger consideration:
Cash paid to shareholders	$	197,336
Cash paid to holders of cancelled stock options and RSUs upon change of control		6,427
Bank line of credit assumed and repaid		102
Total merger consideration		203,865
Fair value of assets acquired and liabilities assumed:
Cash and cash equivalents		60,794
Accounts receivable		25,530
Inventories		40,573
Other current assets		8,582
Property and equipment		11,866
Intangible assets		118,600
Other assets		26,465
Accounts payable		(14,215	)
Deferred income tax liabilities, net		(21,655	)
Other liabilities — current and long term		(80,601	)
Long-term debt		(195,125	)
Net liabilities assumed		(19,186	)
Excess purchase price attributed to goodwill acquired	$	223,051

Acquired intangible assets

	Valuation Method	Estimated Fair Value		Remaining Useful Life (yrs) (1)
Customer relationships	Multi-Period Excess Earnings (2)	$	50,300		7.0
In-process research and development	Multi-Period Excess Earnings (2)		46,000		—
Trade name and trademarks	Relief-from-Royalty (3)		15,100		—
Backlog	Multi-Period Excess Earnings (2)		4,200		0.5
Patents	Relief-from-Royalty (3)		2,900		8.3
Non-compete agreement	Comparative Business Valuation (4)		100		1.0
Total purchased intangible assets		$	118,600

(1) Determination of the estimated useful lives of the individual categories of purchased intangible assets was based on the nature of the applicable intangible asset and the expected future cash flows to be derived from the intangible asset. Amortization of intangible assets with definite lives are recognized over the shorter of the respective lives of the agreement or the period of time the assets are expected to contribute to future cash flows.

(2) The Multi-Period Excess Earnings method is a discounted cash flow method within the income approach that estimates the value of a purchased intangible asset based on the present value of the projected excess net cash flows derived from the operations of the business. The value attributed to customer relationship and backlog intangible assets was based on projected net cash inflows from existing contracts or relationships. The value attributed to IPR&D intangible assets was based on projected net cash inflows from estimates for projects under development.

(3) The Relief-from-Royalty method is a discounted cash flow method within the income approach that calculates the value attributable to owning the trade name, trademarks and patents as opposed to paying a third-party for their use.

(4) The Comparative Business Valuation method is a discounted cash flow method within the income approach whereby the value of the intangible asset is estimated based on the difference in value with and without the non-compete agreement in place.

Pro Forma Results of Operations

	Pro Forma Results of Operations
	Fiscal Quarter Ended July 1, 2011		Nine Fiscal Months Ended July 1, 2011
	(in thousands)
Net revenues	$	40,908	$	130,147
Net loss	$	38,209	$	75,228