Divestitures

During fiscal year 2012, we announced that we would divest all product lines which were not considered core product lines of our business: Actional, Artix, DataXtend, FuseSource, ObjectStore, Orbacus, Orbix, Savvion, Shadow and Sonic. The FuseSource and Shadow product lines were divested in fiscal year 2012. The remaining product lines were divested in the first quarter of fiscal year 2013.

In the third quarter of fiscal year 2013, we divested our Apama product line to Software AG. The purchase price was $44.3 million.

Revenues and direct expenses of the divested product lines have been reclassified as discontinued operations for fiscal years 2012 and 2013. The fiscal year 2012 results include revenues and direct expenses of all divested product lines, since we earned revenues and incurred direct expenses for all or part of fiscal year 2012 for each of those product lines. The fiscal year 2013 results include the revenues and direct expenses of the product lines which had not been divested prior to the start of fiscal year 2013.

Apama

In the third quarter of fiscal year 2013, we divested our Apama product line to Software AG for a purchase price of $44.3 million. Of the total consideration, $4.5 million was held in escrow to secure indemnification claims, if any, for up to 18 months. As of November 30, 2014, the escrow is included in other current assets on the consolidated balance sheet. The escrow was released to us in January 2015.

In connection with the sale, we also entered into a three year distributor license agreement with Software AG for $0.7 million for one of our DataDirect products. The distributor license agreement does not constitute direct cash flows or significant continuing involvement of the Apama product line, and thus does not preclude us from discontinued operations treatment.

Revenues and direct expenses of the Apama product line have been reclassified as discontinued operations for fiscal years 2012 and 2013. The components included in discontinued operations on the consolidated statements of income are as follows (in thousands):



	Fiscal Year Ended
	November 30, 2013			November 30, 2012
Revenue	$	10,550		$	17,593
Income (loss) before income taxes	(12,482		)	(18,348		)
Income tax provision (benefit)	(3,152		)	(5,998		)
Gain on sale, net of tax	22,070			—
Income (loss) from discontinued operations, net	$	12,740		$	(12,350	)

The gain on the sale of the Apama product line was calculated as follows (in thousands):



Purchase price	$	44,268
Less: transaction costs	2,029
Less: net assets
Accounts receivable	2,426
Other current assets	428
Goodwill and intangible assets	6,991
Other long-term assets	426
Deferred revenue	(3,917		)
Gain on sale	35,885
Tax provision	13,815
Gain on sale, net of tax	$	22,070

Artix, Orbacus and Orbix

In the first quarter of fiscal year 2013, we divested our Artix, Orbacus and Orbix product lines to a subsidiary of Micro Focus International plc (Micro Focus) for total consideration of $15.0 million.

Revenues and direct expenses of these product lines have been reclassified as discontinued operations for fiscal years 2012 and 2013. The components included in discontinued operations on the consolidated statements of income are as follows (in thousands):



	Fiscal Year Ended
	November 30, 2013			November 30, 2012
Revenue	$	5,786		$	28,942
Income before income taxes	2,625			6,003
Income tax provision	(130		)	3,562
Gain on sale, net of tax	$	2,009		$	—
Income from discontinued operations, net	$	4,764		$	2,441

In the fourth quarter of fiscal year 2012, we recorded an impairment loss of $8.6 million related to the assets held for sale of the Artix, Orbacus and Orbix product lines based on our expectations of a sales price as compared to our estimation of the net assets to be sold at closing. The impairment loss was recorded as a reserve against the assets held for sale as of November 30, 2012 and was included in income (loss) from discontinued operations.

The gain on sale of the Artix, Orbacus and Orbix product lines was calculated as follows (in thousands):



Purchase price	$	15,000
Less: transaction costs	826
Less: indemnification obligation	30
Less: net assets
Accounts receivables	2,872
Goodwill and intangible assets	24,325
Other assets	20
Impairment reserve	(8,601		)
Deferred revenue	(6,481		)
Gain on sale	2,009
Tax provision	—
Gain on sale, net of tax	$	2,009

In the first quarter of fiscal year 2013, upon the closing of the sale of Artix, Orbacus and Orbix, we amended the definitive purchase and sale agreement with Micro Focus to provide an additional indemnification obligation with respect to a specified vendor. The fair value of the indemnification obligation on the date the sale closed was $1.0 million. During the fourth quarter of fiscal year 2013, the matter was resolved and our actual indemnification obligation was $30,000.

The gain recorded in fiscal year 2013 was the result of differences in our estimation of net assets to be sold at closing as of November 30, 2012 versus the actual value of the net assets sold at closing.

Actional, DataXtend, ObjectStore, Savvion and Sonic

In the first quarter of fiscal year 2013, we divested our Actional, DataXtend, ObjectStore, Savvion and Sonic product lines to the investment arm of Trilogy Enterprises (Trilogy) for total consideration of $60.5 million.



	Fiscal Year Ended
	November 30, 2013			November 30, 2012
Revenue	$	(450	)	$	81,576
Loss before income taxes	(980		)	(18,314		)
Income tax benefit	(248		)	(6,234		)
Gain on sale, net of tax	$	18,358		$	—
Income (loss) from discontinued operations, net	$	17,626		$	(12,080	)

The gain on sale of the Actional, DataXtend, ObjectStore, Savvion and Sonic product lines was calculated as follows (in thousands):



Purchase price	$	60,500
Less: transaction costs	1,211
Less: net assets
Accounts receivables	12,380
Goodwill and intangible assets	31,693
Other assets	976
Deferred revenue	(19,168		)
Other liabilities	(299		)
Gain on sale	33,707
Tax provision	15,349
Gain on sale, net of tax	$	18,358

Shadow

In the fourth quarter of fiscal year 2012, we divested our Shadow product line to Rocket Software, Inc for total consideration of $33.0 million. Of the total consideration, $3.3 million was held in escrow to secure indemnification claims, if any, for 15 months. We received the $3.3 million during the first quarter of fiscal year 2014.

Revenues and direct expenses of the Shadow product line have been reclassified as discontinued operations for fiscal years 2012 and 2013. The components included in discontinued operations on the consolidated statements of income are as follows (in thousands):



	Fiscal Year Ended
	November 30, 2013		November 30, 2012
Revenue	$	—	$	12,518
Income (loss) before income taxes	—		4,882
Income tax provision (benefit)	—		164
Gain on sale, net of tax	—		12,692
Income from discontinued operations, net	$	—	$	17,410

The gain on sale of the Shadow product line was calculated as follows (in thousands):



Purchase price	$	31,903
Less: transaction costs	1,264
Less: net assets sold
Accounts receivables	1,592
Goodwill and intangible assets	10,540
Other assets	103
Deferred revenue	(6,859		)
Gain on sale	$	25,263
Tax provision	12,571
Gain on sale, net of tax	$	12,692

The total purchase price was reduced by $1.1 million, the amount of consideration received as part of the total $33.0 million of consideration from Rocket Software, Inc., for a three year distributor license agreement for one of our DataDirect products. The distributor license agreement does not constitute direct cash flows or significant continuing involvement of the Shadow product line, and thus does not preclude us from discontinued operations treatment.

FuseSource

In the fourth quarter of fiscal year 2012, we divested our FuseSource product line to Red Hat, Inc for total consideration of $21.3 million. Of the total consideration, $2.1 million is held in escrow to secure indemnification claims, if any, for up to 15 months. As of November 30, 2014 and 2013, the escrow is included in other current assets on the consolidated balance sheet.

Revenues and direct expenses of the FuseSource product line have been reclassified as discontinued operations for fiscal years 2012 and 2013. The components included in discontinued operations on the consolidated statements of income are as follows (in thousands):



	Fiscal Year Ended
	November 30, 2013		November 30, 2012
Revenue	$	—	$	14,484
Loss before income taxes	—		(7,118		)
Income tax benefit	—		(3,000		)
Gain on sale, net of tax	—		11,187
Income (loss) from discontinued operations, net	$	—	$	7,069

The gain on sale of the FuseSource product line was calculated as follows (in thousands):



Purchase price	$	21,300
Less: net assets sold
Accounts receivables	2,749
Goodwill and intangible assets	3,690
Other assets	167
Deferred revenue	(5,148		)
Gain on sale	$	19,842
Tax provision	8,655
Gain on sale, net of tax	$	11,187