Business Combinations

12 Months Ended

Mar. 31, 2012

Business Combinations [Abstract]

Business Combinations

(2) Business Combinations

Fiscal 2012 Acquisitions

In April 2011, we acquired all of the outstanding shares of Coradiant Inc. (Coradiant), a global provider of end-to-end performance management of web applications, for total cash consideration of $130.0 million. Coradiant’s operating results have been included in our condensed consolidated financial statements since the acquisition date. This acquisition expands BMC’s current application performance management offering to provide real-time insight into application performance and its impact on user behavior across enterprise, software-as-a-service (SaaS) and cloud environments. The purchase consideration was allocated to acquired assets and assumed liabilities consisting primarily of $18.1 million of acquired technology and $22.7 million of customer relationships, both with a weighted average economic life of three years, in addition to other tangible assets and liabilities. This acquisition resulted in an allocation of $91.7 million to goodwill assigned to our Enterprise Service Management (ESM) segment. Factors that contributed to a purchase price that resulted in goodwill include, but are not limited to, the retention of research and development personnel with the skills to develop future Coradiant technology, support personnel to provide maintenance services related to Coradiant products and a trained sales force capable of selling current and future Coradiant products and the opportunity to cross-sell our products and Coradiant products to existing customers.

In June 2011, we also completed the acquisitions of Aeroprise, Inc., a provider of mobile IT service management solutions, as part of our ESM segment, and Neon Enterprise Software, LLC’s portfolio of IMS solution software as part of our Mainframe Service Management (MSM) segment, for combined cash consideration of $21.0 million. The purchase consideration was allocated to acquired assets and assumed liabilities consisting primarily of $11.2 million of acquired technology, with weighted average economic lives of three years, in addition to other tangible assets and liabilities. These acquisitions resulted in an allocation of $4.9 million to goodwill assigned to our ESM segment and $6.0 million assigned to our MSM segment.

In December 2011, we completed the acquisition of I/O Concepts Software Corporation, a provider of mainframe management and security solutions, for total cash consideration of $14.1 million. The purchase consideration was allocated to acquired assets and assumed liabilities consisting primarily of $5.4 million of acquired technology, with a weighted average economic life of three years, in addition to other tangible assets and liabilities. This acquisition resulted in an allocation of $10.3 million to goodwill assigned to our MSM segment.

In February 2012, we completed the acquisition of Numara Software Holdings, Inc. (Numara), a provider of integrated IT service management solutions for mid-sized and small companies, for total cash consideration of $305.9 million. Numara’s operating results have been included in our consolidated financial statements since the acquisition date as part of our ESM segment.

The estimated fair values of acquired assets and assumed liabilities attributed to Numara at the date of acquisition were:

	February 3, 2012
	(In millions)
Cash and cash equivalents	$	4.5
Trade accounts receivable		7.3
Other assets		1.6
Intangible assets		198.6
Goodwill		204.5
Total assets		416.5
Other current liabilities		10.6
Deferred tax liabilities		86.4
Deferred revenue		13.6
Total liabilities		110.6
Net assets acquired	$	305.9

Factors that contributed to a purchase price that resulted in goodwill include, but are not limited to, the opportunity to cross-sell our products and Numara’s products to existing customers and the retention of research and development personnel with the skills to develop future Numara technology, support personnel to provide maintenance services related to Numara products and a trained sales force capable of selling current and future Numara products. The goodwill resulting from the transaction was assigned to the ESM segment and is not deductible for tax purposes.

The acquired identifiable intangible assets consisted of:

	Fair Value		Economic Life in Years
	(In millions)
Customer contracts and relationships	$	164.4		5
Developed product technology		32.4		3
Trademarks and tradenames		1.8		3
Total identifiable intangible assets	$	198.6

The results of operations of Numara are included in our consolidated statements of comprehensive income prospectively from February 3, 2012. The unaudited pro forma combined historical results for fiscal 2012 and 2011, giving effect to the acquisition of Numara assuming the transaction was consummated as of April 1, 2010, were:

	Year Ended March 31,
	2012		2011
	(In millions)
	(Unaudited)
Pro Forma Combined:
Revenue	$	2,254.7	$	2,126.8
Net earnings		391.8		428.2

The pro forma combined historical results prior to the date of acquisition do not reflect any cost savings or other synergies resulting from the transaction, are provided for informational purposes only and are not necessarily indicative of the combined results of operations for future periods or the results that actually would have been realized had the acquisition occurred at the beginning of the specified period.

The preliminary purchase price allocation for Numara was based on preliminary calculations and valuations, and our estimates and assumptions for this acquisition are subject to change as we obtain additional information for our estimates during the measurement period (up to one year from the acquisition date). The primary areas that are not yet finalized relate to certain tangible assets acquired and liabilities assumed, identifiable intangible assets, income and non-income based taxes and residual goodwill.

Fiscal 2011 Acquisitions

During fiscal 2011, we completed the acquisition of the software business of Neptuny S.r.l., a provider of continuous capacity optimization software, and the acquisition of GridApp Systems, Inc., a provider of comprehensive database provisioning, patching and administration software, for combined purchase consideration of $51.5 million. The purchase consideration was allocated to acquired assets and assumed liabilities consisting primarily of $20.7 million of acquired technology, with weighted average economic lives of three years, in addition to other tangible assets and liabilities. These acquisitions resulted in an allocation of $34.2 million to goodwill assigned to our ESM segment. The operating results of the acquired companies have been included in our consolidated financial statements since the respective acquisition dates. Pro forma information is not included because the acquired companies’ operations would not have materially impacted our consolidated operating results.

Fiscal 2010 Acquisitions

During fiscal 2010, we completed the acquisitions of MQSoftware, Inc., a provider of middleware and enterprise application transaction management software, Tideway Systems Limited, a provider of IT discovery solutions, and Phurnace Software, Inc., a developer of software that automates the deployment and configuration of business-critical Java EE applications, for combined purchase consideration of $94.3 million. The purchase consideration was allocated to acquired assets and assumed liabilities, consisting primarily of approximately $36.3 million of acquired technology and $9.4 million of customer relationships, with weighted average economic lives of three years, in addition to other tangible assets and liabilities. These acquisitions resulted in an allocation of $61.3 million to goodwill, of which $12.8 million was assigned to the MSM segment and $48.5 million was assigned to the ESM segment. The operating results of the acquired companies have been included in our consolidated financial statements since the respective acquisition dates. Pro forma information is not included because the acquired companies’ operations would not have materially impacted our consolidated operating results.