Acquisitions and Divestitures

3 Months Ended

Oct. 24, 2015

Business Combinations [Abstract]

Business Combinations

3. Acquisitions and Divestitures

The Company completed threeacquisitions during the three months ended October 24, 2015. A summary of the allocation of the total purchase consideration is presented as follows (in millions):

	Purchase Consideration		Net Liabilities Assumed			Purchased Intangible Assets		Goodwill
MaintenanceNet	$	105	$	(21	)	$	65	$	61
OpenDNS	545		(9		)	61		493
Other	6		(1		)	4		3
Total	$	656	$	(31	)	$	130	$	557

On August 6, 2015, the Company completed its acquisition of privately held MaintenanceNet, Inc. ("MaintenanceNet"), a provider of a cloud-based software platform that uses data analytics and automation to manage renewals of recurring customer contracts. This acquisition is a component of the Company's strategy for its Services organization to simplify and digitize its business processes.

On August 26, 2015, the Company completed its acquisition of privately held OpenDNS, Inc. ("OpenDNS"), a provider of advanced threat protection for endpoint devices. With the OpenDNS acquisition, the Company aims to strengthen its security offerings by adding broad visibility and threat intelligence delivered through a software-as-a-service platform. Revenue from the OpenDNS acquisition has been included in the Company's Security product category.

The total purchase consideration related to the Company’s acquisitions completed during the three months ended October 24, 2015 consisted of cash consideration and the assumption of vested share-based awards. The total cash and cash equivalents acquired from these business combinations was approximately $9 million. Total transaction costs related to the Company’s acquisition activities were $5 million and $2 million for the three months ended October 24, 2015 and October 25, 2014, respectively. These transaction costs were expensed as incurred in general and administrative expenses ("G&A") in the Consolidated Statements of Operations.

The Company’s purchase price allocation for acquisitions completed during recent periods is preliminary and subject to revision as additional information about fair value of assets and liabilities becomes available. Additional information that existed as of the acquisition date but at that time was unknown to the Company may become known to the Company during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. Adjustments in the purchase price allocation may require a recasting of the amounts allocated to goodwill retroactive to the period in which the acquisition occurred.

The goodwill generated from the Company’s acquisitions completed during the three months ended October 24, 2015 is primarily related to expected synergies. The goodwill is generally not deductible for income tax purposes.

The Consolidated Financial Statements include the operating results of each acquisition from the date of acquisition. Pro forma results of operations for the acquisitions completed during the three months ended October 24, 2015 have not been presented because the effects of the acquisitions, individually and in the aggregate, were not material to the Company’s financial results.

Pending Divestiture On July 22, 2015, the Company entered into an exclusive agreement to sell the client premises equipment portion of its Service Provider Video connected devices business to French-based Technicolor for approximately $600 million in cash and stock subject to certain adjustments provided for in the agreement.  In connection with this transaction, the Company had tangible assets of approximately $100 million which were held for sale (of which the most significant component is inventories of approximately $80 million), and current liabilities of approximately $120 million (primarily comprised of supply chain-related liabilities, warranties, rebates and other accrued liabilities), which were held for sale as of October 24, 2015. The Company estimates that approximately $150 million of goodwill is attributable to this business, based on its relative fair value. The Company is working to close the transaction during the second quarter of fiscal 2016, subject to customary closing conditions including the receipt of certain regulatory approvals.