Acquisition

3 Months Ended

Jul. 01, 2011

Acquisition

Acquisition

Note 3. Acquisition

On June 24, 2011, we completed the acquisition of Clearwell Systems Inc. ("Clearwell"), a privately-held provider of eDiscovery solutions.  In exchange for all of the voting equity interests of Clearwell, we paid a total purchase price of $392 million, including cash acquired of $20 million and stock options assumed of $8 million. The objective of the acquisition is to enhance our eDiscovery, archiving and backup offerings to our customers.  The results of operations of Clearwell are included since the date of acquisition as part of the Storage and Server Management segment. Supplemental pro forma information for Clearwell was not material to our financial results and therefore has not been included.

The initial allocation of the purchase price was based on a preliminary valuation, and our estimates and assumptions are subject to change within the measurement period, up to one year from the acquisition date. The purchase accounting items that are not yet finalized include the valuation of intangible assets acquired, the fair value of certain tangible assets and liabilities acquired, and the calculation of certain deferred tax assets and liabilities.

The following table presents the preliminary purchase price allocation included in our Condensed Consolidated Balance Sheets (in millions):

Net tangible assets (1)	$                  31
Intangible assets (2)	168
Goodwill (3)	258
Net tax liabilities	(65)
Total purchase price	$                392

____________

⁽¹⁾      Net tangible assets included deferred revenue which was adjusted down from $13 million to $3 million representing our estimate of the fair value of the contractual obligation assumed for support services.

⁽²⁾      Intangible assets included developed technology, customer relationships and tradename of $60 million, $96 million and $12 million, respectively, which are amortized over their estimated useful lives of seven to eight years. 

⁽³⁾    Goodwill is not tax deductible. The amount resulted primarily from our expectation of synergies from the integration of Clearwell product offerings with our product offerings.