Note 9: Acquisitions and Divestitures

Acquisitions

In fiscal 2015, HP completed five acquisitions. The purchase price allocation for these acquisitions as set forth in the table below reflects various preliminary fair value estimates and analyses, including preliminary work performed by third-party valuation specialists, which are subject to change within the measurement period as valuations are finalized. The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the fair values of certain tangible assets and liabilities acquired, the valuation of intangible assets acquired, certain legal matters, income and non-income based taxes, and residual goodwill. HP expects to continue to obtain information to assist it in determining the fair value of the net assets acquired at the acquisition date during the measurement period. Measurement period adjustments that HP determines to be material will be applied retrospectively to the period of acquisition in HP's Consolidated Financial Statements and, depending on the nature of the adjustments, other periods subsequent to the period of acquisition could also be affected.

Pro forma results of operations for these acquisitions have not been presented because they are not material to HP's consolidated results of operations, either individually or in the aggregate. Goodwill, which represents the excess of the purchase price over the net tangible and intangible assets acquired, is not deductible for tax purposes.

The following table presents the aggregate purchase price allocation, including those items that are still preliminary allocations, for HP's acquisitions in fiscal 2015:

	In millions
Goodwill	$	1,987
Amortizable intangible assets		704
In-process research and development		159
Net assets assumed		221

Total fair value of consideration	$	3,071

Acquisition of Aruba

HP's largest acquisition in fiscal 2015 was the acquisition of Aruba, which was completed in May 2015. Aruba is a leading provider of next-generation network access solutions for the mobile enterprise. HP reported the financial results of Aruba's business in the Networking business unit within the EG segment. The acquisition date fair value of consideration of $2.8 billion consisted of cash paid for outstanding common stock, vested in-the-money stock awards and the estimated fair value of earned unvested stock awards assumed by HP. In connection with this acquisition, HP recorded approximately $1.8 billion of goodwill, $643 million of intangible assets and $153 million of IPR&D. HP is amortizing the intangible assets on a straight-line basis over an estimated weighted-average life of six years.

Acquisitions in prior year

In fiscal 2014, HP completed two acquisitions with a combined purchase price of $55 million, of which $12 million was recorded as goodwill and $25 million was recorded as intangible assets related to these acquisitions.

Divestitures

In fiscal 2015, HP completed five divestitures which resulted in $246 million of proceeds. These divestitures included HP's sale of its web-based photo sharing and photo printing service, Snapfish. Snapfish was previously reported within the Consumer Hardware business unit within the Printing segment. Additionally, HP completed the sales of its LiveVault and iManage businesses, which were previously reported within the Software segment. The gains associated with these divestitures were included in Selling, general and administrative expenses in the Consolidated Statements of Earnings.

In May 2015, HP and Tsinghua Holdings jointly announced a partnership that will bring together the Chinese enterprise technology assets of Hewlett Packard Enterprise and Tsinghua University to create a Chinese provider of technology infrastructure. Under the definitive agreement, Tsinghua Holdings' subsidiary, Unisplendour Corporation, will purchase 51% of a new business called H3C, comprising Hewlett Packard Enterprise's current H3C Technologies and China-based server, storage and technology services businesses, for approximately $2.3 billion. Hewlett Packard Enterprise China will maintain 100% ownership of its existing China-based ES, Aruba, Software and Hewlett Packard Enterprise Helion Cloud businesses. Once the transaction closes, the new H3C will be the exclusive provider for Hewlett Packard Enterprise's server, storage and networking portfolio, as well as Hewlett Packard Enterprise's exclusive hardware support services provider in China, customized for that market. The transaction will be a part of Hewlett Packard Enterprise as a result of the Separation and is expected to close during the first quarter of fiscal 2016, subject to regulatory approvals and other closing conditions.

In October 2015, HP signed a definitive agreement to sell the TippingPoint business to Trend Micro International for approximately $300 million. TippingPoint is a provider of next-generation intrusion prevention systems and related network security solutions. The results of TippingPoint were recorded within the Software segment. The transaction will be a part of Hewlett Packard Enterprise as a result of the Separation and is expected to close during the first quarter of fiscal 2016, subject to regulatory approvals and other closing conditions.