Acquisitions and Divestitures


(a)	Acquisition Summary

We completed eight acquisitions during fiscal 2018. A summary of the allocation of the total purchase consideration is presented as follows (in millions):



Fiscal 2018	Purchase Consideration		Net Tangible Assets Acquired (Liabilities Assumed)			Purchased Intangible Assets		Goodwill
Viptela	$	497	$	(18	)	$	180	$	335
Springpath	248		(11		)	160		99
BroadSoft	2,179		353			430		1,396
Accompany	222		6			55		161
Others (four in total)	72		4			42		26
Total	$	3,218	$	334		$	867	$	2,017

On July 31, 2017, we completed our acquisition of privately held Viptela Inc. ("Viptela"), a provider of software-defined wide area networking products. Revenue from the Viptela acquisition has been included in our Infrastructure Platforms product category.

On September 22, 2017, we completed our acquisition of privately held Springpath, Inc. ("Springpath"), a hyperconvergence software company. Revenue from the Springpath acquisition has been included in our Infrastructure Platforms product category.

On February 1, 2018, we completed our acquisition of publicly held BroadSoft, Inc. ("BroadSoft"), a cloud calling and contact center solutions company. Revenue from the BroadSoft acquisition has been included in our Applications product category.

On May 10, 2018, we completed our acquisition of privately held Accompany, a provider of an AI-driven relationship intelligence platform. Results from the Accompany acquisition will be included in our Applications product category.

The total purchase consideration related to our acquisitions completed during fiscal 2018 consisted of cash consideration and vested share-based awards assumed. The total cash and cash equivalents acquired from these acquisitions was approximately $187 million.

Fiscal 2017 Acquisitions

Allocation of the purchase consideration for acquisitions completed in fiscal 2017 is summarized as follows (in millions):



Fiscal 2017	Purchase Consideration		Net Tangible Assets Acquired (Liabilities Assumed)			Purchased Intangible Assets		Goodwill
CloudLock	$	249	$	—		$	36	$	213
AppDynamics	3,258		(175		)	785		2,648
MindMeld	104		(11		)	51		64
Others (four in total)	26		—			6		20
Total	$	3,637	$	(186	)	$	878	$	2,945

On August 1, 2016, we acquired privately held CloudLock Inc. ("CloudLock"), a provider of cloud security that specializes in cloud access security broker technology that provides enterprises with visibility and analytics around user behavior and sensitive data in cloud services. Revenue from the CloudLock acquisition has been included in our Security product category.

On March 17, 2017, we acquired privately held AppDynamics, Inc. ("AppDynamics"), an application intelligence software company. AppDynamics's cloud application and business monitoring platform is designed to enable companies to improve application and business performance. With the AppDynamics acquisition, we seek to provide end-to-end visibility and intelligence from the customer's network through to the application. Product revenue from the AppDynamics acquisition has been included in our Other product category.

On May 26, 2017, we acquired privately held MindMeld, Inc. ("MindMeld"), an artificial intelligence (AI) company. MindMeld's unique AI platform enables customers to build intelligent and human-like conversational interfaces for any application or device. Revenue from the MindMeld acquisition has been included in our Collaboration product category.

The total purchase consideration related to our acquisitions completed during fiscal 2017 consisted of cash consideration and vested share-based awards assumed. The total cash and cash equivalents acquired from these acquisitions was approximately $138 million.

Fiscal 2016 Acquisitions

In fiscal 2016, we completed 12 acquisitions for total purchase consideration of $3.4 billion.


(b)	Pending Divestiture of Service Provider Video Software Solutions Business

In the fourth quarter of fiscal 2018, we announced a definitive agreement to sell our Service Provider Video Software Solutions ("SPVSS") business. As of July 28, 2018, this business had tangible assets of approximately $175 million (primarily comprised of accounts receivables, inventories and various other current and long-term assets) and net intangible assets and goodwill (based on relative fair value) of $300 million. In addition, the business had total liabilities of approximately $320 million (primarily comprised of deferred revenue and various other current and long-term liabilities). These assets and liabilities were held for sale and were not presented separately as the amounts were not material to the Consolidated Balance Sheet. We expect to have an immaterial financial statement impact from this transaction upon closing. The transaction is expected to close in the first half of fiscal 2019, subject to customary closing conditions and regulatory approvals.

On August 2, 2018, we announced our intent to acquire Duo Security, Inc., the leading provider of unified access security and multi-factor authentication delivered through the cloud. Integrating our network, device and cloud security platforms with Duo Security's zero-trust authentication and access products is designed to enable customers to easily and securely connect users to any application on any networked device.

Under the terms of the agreement, we have agreed to pay approximately $2.35 billion in cash and assumed equity awards to acquire Duo Security. The acquisition is expected to close during the first quarter of fiscal 2019 subject to customary closing conditions and regulatory approvals. Upon close of the acquisition, revenue from Duo Security will be included in our Security product category.

(d) Other Acquisition and Divestiture Information

Total transaction costs related to our acquisition and divestiture activities during fiscal 2018, 2017, and 2016 were $41 million, $10 million, and $32 million, respectively. These transaction costs were expensed as incurred in G&A expenses in the Consolidated Statements of Operations.

Our 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 us, may become known to us 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 our acquisitions completed during fiscal 2018 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 fiscal 2018, 2017, and 2016 have not been presented because the effects of the acquisitions, individually and in the aggregate, were not material to our financial results.

We completed two divestitures during fiscal 2018. The financial statement impact of these divestitures was not material for fiscal 2018.