BUSINESS COMBINATIONS

9 Months Ended

Sep. 28, 2012

BUSINESS COMBINATION [Abstract]

Business Combination Disclosure [Text Block]

NOTE 4. BUSINESS COMBINATION

Tekla Corporation

On July 8, 2011 the Company acquired 99.46% of the outstanding shares of Tekla Corporation (“Tekla”) for $454.9 million in cash. Tekla is headquartered in Finland and is a provider of building information modeling software and other model driven solutions for customers in the infrastructure and energy industries. The Company purchased the remaining shares of Tekla in February 2012 after completing compulsory redemption proceedings under the Finish Companies Act. The acquisition was funded through the use of approximately $54.9 million of the Company's existing cash, with the remainder funded through the Company's credit facilities. In connection with the acquisition, the Company incurred approximately $6.4 million in acquisition-related costs related primarily to investment banking, legal, accounting and other professional services. The acquisition costs were expensed as incurred and were included in General and administrative expenses in the Condensed Consolidated Financial Statements with $5.6 million and $6.4 million recognized in the third and first three quarters of fiscal 2011, respectively.

Tekla is a leading provider of information model based software for the building and construction and infrastructure and energy industries. The objective of the acquisition was to integrate Tekla's Building Information Modeling (BIM) software solutions with Trimble's building construction estimating, project management and BIM-to-field solutions and enable a compelling set of productivity solutions for contractors around the world. Tekla's infrastructure and energy solutions complement Trimble's growing portfolio of utilities and municipalities solutions.  Additionally, Trimble's significant global customer base immediately extended Tekla's customer reach while Tekla's global presence in the building and construction market bolstered Trimble's own customer reach.

Tekla's results of operations from July 8, 2011 through the end of the third quarter of fiscal 2011 have been included in the Company's Condensed Consolidated Statements of Income for the third and first three quarters of fiscal 2011. Tekla's building and construction activities are included within the Company's Engineering and Construction business segment and Tekla's infrastructure and energy activities are included within the Company's Field Solutions business segment.

The fair value of identifiable assets acquired and liabilities assumed were determined under the acquisition method of accounting for business combinations. The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. The fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed are based on estimates and assumptions provided by management.

The following table summarizes the consideration transferred to acquire Tekla and the assets acquired and liabilities assumed and the estimated useful lives of the identifiable intangible assets acquired as of the date of the acquisition:

			Estimated
			Fair Value
(Dollars in thousands)
Total purchase consideration*			$	457,387
	Net tangible assets acquired		13,279
	Intangible assets acquired:					Estimated useful Life
		Developed product technology	107,260			7 years
		In-process research and development	7,591			Evaluated upon completion
		Order backlog	1,246			6 months
		Customer relationships	83,929			8 years
		Trade name	7,648			8 years
		Subtotal	207,674
	Deferred tax liability		(53,996		)
Less fair value of all assets/liabilities acquired			166,957
Goodwill			$	290,430

* Of the $457.4 million, $2.5 million was held in a cash account at the end of fiscal 2011 and represents the 0.54% of shares that were not yet acquired by the Company. In February, 2012 the Company purchased the remaining shares at the same per share price as was provided for the original 99.46% of shares obtained. Therefore, the non-controlling interest was valued based on that per-share price.

Goodwill represents the excess of the fair value of consideration paid over the fair value of the underlying net tangible and intangible assets acquired. Goodwill consists of Tekla's highly skilled and valuable assembled workforce, a proven ability to generate new products and services to drive future revenue, and a premium paid by the Company for synergies unique to its business. The Company recorded $290.4 million of goodwill from this acquisition with $245.6 million assigned to the Engineering and Construction segment and $44.8 million assigned to the Field Solutions segment. None of the goodwill recognized is expected to be deductible for income tax purposes.

Details of the net tangible assets acquired are as follows:

	As of July 8, 2011
(Dollars in thousands)
Cash and cash equivalents	$	12,871
Account receivable	12,862
Other receivables	1,712
Other current assets	2,181
Property and equipment, net	4,066
Other non-current assets	5,113
Accounts payable	(1,329		)
Accrued liabilities	(12,842		)
Deferred revenue liability	(10,048		)
Other non-current liabilities	(1,307		)
Total net tangible assets acquired	$	13,279

The historical financial statements of Tekla were prepared in accordance with International Financial Reporting Standards (“IFRS”). Therefore, the Company adjusted the net tangible assets and liabilities in accordance with U.S. generally accepted accounting principles (“GAAP”). In addition, the Company recorded adjustments to align Tekla's accounting policies with that of the Company and adjustments to measure the assets and liabilities assumed at fair value.

During the third and first three quarters ended fiscal 2011, Tekla contributed $15.2 million of revenue and recorded $1.1 million of operating loss within the business segments. The following table presents pro forma results of operations of the Company and Tekla, as if the companies had been combined as of the beginning of the earliest period presented. The unaudited pro forma results of operations are not necessarily indicative of results that would have occurred had the acquisition taken place on January 1, 2011, or of future results.  Included in the pro forma results are fair value adjustments based on the fair values of assets acquired and liabilities assumed as of the acquisition date of July 8, 2011. Pro-forma results include amortization of intangible assets related to the acquisition, interest expense for debt used to purchase Tekla, and income tax effects, and for the third and first three quarters ended fiscal 2011, the pro forma results exclude foreign currency transaction gain/(loss) recognized on a hedge and acquisition related cost associated with the purchase of Tekla. The pro forma information for the third and first three quarters ended fiscal 2011 is as follows:

	Third Quarter of		First Three Quarters of
	2011		2011
(Dollars in thousands)
Total revenues	$	417,433	$	1,262,387
Net income	32,986		119,092
Net income attributable to Trimble Navigation Ltd.	33,761		120,197
Basic earnings per share	0.27		0.98
Diluted earnings per share	0.27		0.95