Acquisitions

12 Months Ended

Dec. 31, 2011

Business Combination, Description [Abstract]

Acquisitions

3. ACQUISITIONS

2011 Acquisitions

Netviewer AG

In February 2011, the Company acquired all of the issued and outstanding securities of Netviewer AG (the “Netviewer Acquisition” or “Netviewer”), a privately held European SaaS vendor in collaboration and information technology (“IT”) services. Netviewer became part of the Company’s Online Services division and the acquisition enables the extension of its Online Services business in Europe. The total consideration for this transaction was approximately $107.5 million, net of $6.3 million of cash acquired, and was paid in cash. Transaction costs associated with the acquisition were approximately $3.1 million, of which the Company expensed $1.1 million and $2.0 million during the years ended December 31, 2011 and 2010, respectively, and are included in general and administrative expense in the accompanying consolidated statement of income. In addition, in connection with the acquisition, the Company assumed non-vested stock units which were converted into the right to receive up to 99,100 shares of the Company's common stock, for which the vesting period reset fully upon the closing of the transaction.

Cloud.com

In July 2011, the Company acquired all of the issued and outstanding securities of Cloud.com, Inc. (the "Cloud.com Acquisition" or "Cloud.com"), a privately held provider of software infrastructure platforms for cloud providers. Cloud.com became part of the Company’s Enterprise division and the acquisition further establishes the Company as a leader in infrastructure for the growing cloud provider market. The total consideration for this transaction was approximately $158.8 million, net of $5.6 million of cash acquired, and was paid in cash. Transaction costs associated with the acquisition were approximately $2.9 million, all of which the Company expensed during the year ended December 31, 2011, and are included in general and administrative expense in the accompanying consolidated statements of income. In addition, in connection with the acquisition, the Company assumed non-vested stock units which were converted into the right to receive up to 288,742 shares of the Company's common stock and certain stock options which are exercisable for 183,780 shares of the Company's common stock, for which the vesting period reset fully upon the closing of the transaction.

ShareFile

In October 2011, the Company acquired all of the issued and outstanding securities of Novel Labs, Inc. (d/b/a “ShareFile”), a privately held provider of secure data sharing and collaboration solutions. ShareFile became part of the Company's Enterprise division. The total consideration for this transaction was approximately $54.5 million, net of $1.7 million of cash acquired, and was paid in cash. Transaction costs associated with the acquisition were approximately $0.7 million, all of which the Company expensed during the year ended December 31, 2011, and are included in general and administrative expense in the accompanying consolidated statements of income. In addition, in connection with the acquisition, the Company assumed non-vested stock units which were converted into the right to receive up to 180,697 shares of the Company's common stock and assumed certain stock options which are exercisable for 390,775 shares of the Company's common stock, for which the vesting period reset fully upon the closing of the transaction.

App-DNA

In November 2011, the Company acquired all of the issued and outstanding securities of App-DNA, a privately held company that specializes in application migration and management. App-DNA became part of the Company's Enterprise division. The total consideration for this transaction was approximately $91.3 million, net of $3.2 million of cash acquired, and was paid in cash. Transaction costs associated with the acquisition were approximately $1.3 million, all of which the Company expensed during the year ended December 31, 2011 and are included in general and administrative expense in the accompanying consolidated statements of income. In addition, in connection with the acquisition, the Company assumed non-vested stock units which were converted into the right to receive up to 114,487 shares of the Company's common stock, for which the vesting period reset fully upon the closing of the transaction.

Other Acquisitions

During the first quarter of 2011, the Company acquired certain assets of a wholly-owned subsidiary of a privately-held company (the "Other Acquisition") for total cash consideration of approximately $10.5 million. The Company accounted for this acquisition as a business combination in accordance with the authoritative guidance and it became part of the Company’s Enterprise division, thereby expanding the Company’s solutions portfolio for service providers and developing integrations with the Company’s application delivery solutions.

In August 2011, the Company acquired all of the issued and outstanding securities of RingCube Technologies, Inc. (the "RingCube Acquisition" or "RingCube"), a privately held company that specializes in user personalization technology for virtual desktops. RingCube became part of the Company’s Enterprise division and the acquisition further solidifies the Company's position in desktop virtualization. The total consideration for this transaction was approximately $32.2 million, net of $0.5 million of cash acquired, and was paid in cash. Transaction costs associated with the acquisition were approximately $0.6 million, all of which the Company expensed during the year ended December 31, 2011, and are included in general and administrative expense in the accompanying consolidated statements of income. In addition, in connection with the RingCube acquisition, the Company assumed non-vested stock units which were converted into the right to receive up to 58,439 shares of the Company's common stock, for which the vesting period reset fully upon the closing of the transaction.

Purchase Accounting for the 2011 Acquisitions

The purchase prices for the 2011 Acquisitions, which includes Netviewer, Cloud.com, Ringcube, ShareFile, App-DNA and the Other Acquisition, were allocated to the acquired companies' net tangible and intangible assets based on their estimated fair values as of the date of the acquisition. The allocations of the total purchase prices are summarized below (in thousands):

	Netviewer				Cloud.com				ShareFile
	Purchase Price Allocation			Asset Life	Purchase Price Allocation			Asset Life	Purchase Price Allocation			Asset Life
Current assets	$	12,082			$	6,460			$	2,108
Other assets	330				32				20
Property and equipment	2,350			Various	260			Various	197			Various
Deferred tax assets, non-current	10,192				3,819				—
Intangible assets	28,806			4-7 years	89,000			7-12 years	28,200			4-6 years
Goodwill	98,725			Indefinite	100,649			Indefinite	49,879			Indefinite
Assets acquired	152,485				200,220				80,404
Current liabilities assumed	(18,144		)		(1,639		)		(13,234		)
Long-term liabilities assumed	(11,949		)		—				(149		)
Deferred tax liabilities, non-current	(8,554		)		(34,174		)		(10,823		)
Net assets acquired	$	113,838			$	164,407			$	56,198

	App-DNA				Other Acquisitions (1)
	Purchase Price Allocation			Asset Life	Purchase Price Allocation			Asset Life
Current assets	$	13,422			$	569
Other assets	172				189
Property and equipment	662			Various	—			N/A
Deferred tax assets, non-current	—				14,055
Intangible assets	44,760			4-5 years	30,600			2-8 years
Goodwill	58,204			Indefinite	15,540			Indefinite
Assets acquired	117,220				60,953
Current liabilities assumed	(9,221		)		(7,150		)
Long-term liabilities assumed	(905		)		(636		)
Deferred tax liabilities, non-current	(12,551		)		(9,979		)
Net assets acquired	$	94,543			$	43,188

⁽¹⁾ Includes RingCube and the Other Acquisition.

Current assets acquired in connection with the 2011 Acquisitions consisted primarily of cash and accounts receivable. Current liabilities assumed in connection with the 2011 Acquisitions consisted primarily of deferred revenues, short-term payables, and other accrued expenses. Long-term liabilities assumed in connection with the 2011 Acquisitions consisted of the non-current portion of deferred revenue, other long-term liabilities and long term debt which was paid in full subsequent to the respective acquisition date. The Company continues to evaluate certain income tax assets and liabilities related to the 2011 Acquisitions. Goodwill related to the Netviewer Acquisition was assigned to the Company's Online Services division and the goodwill related to each of the Cloud.com Acquisition, RingCube Acquisition, ShareFile Acquisition, App-DNA Acquisition and the Other Acquisition was assigned to the Company's Enterprise division. The goodwill related to the 2011 Acquisitions is not deductible for tax purposes. See Note 12 for segment information. The goodwill amounts are comprised primarily of expected synergies from combining operations and other intangible assets that do not qualify for separate recognition.

Revenues from Netviewer are included in the Company's Online Services division's revenue. Revenues from all other 2011 acquisitions are included in the Company's Enterprise division's revenue. The Company has included the effect of the 2011 Acquisitions in its results of operations prospectively from the date of each acquisition.

Identifiable intangible assets purchased in the 2011 Acquisitions, in thousands, and their weighted-average lives are as follows:

	Netviewer		Asset Life	Cloud.com		Asset Life	ShareFile		Asset Life
Trade names	$	541	4.0 years	$	6,000	12.0 years	$	6,900	5.0 years
Customer relationships	25,019		7.0 years	7,000		8.0 years	5,300		4.0 years
Core and product technologies	3,246		4.0 years	58,000		7.0 years	16,000		6.0 years
Domain name	—			18,000		12.0 years	—
Total	$	28,806		$	89,000		$	28,200

	App-DNA		Asset Life	Other Acquisitions (1)		Asset Life
Trade names	$	1,500	5.0 years	$	60	2.0 years
Customer relationships	5,800		5.0 years	3,200		5.3 years
Core and product technologies	36,700		5.0 years	26,000		5.0 years
Non-compete agreements	760		4.0 years	1,340		3.8 years
Total	$	44,760		$	30,600

⁽¹⁾ Includes RingCube and the Other Acquisition.

The following unaudited pro-forma information combines the consolidated results of operations of the Company, Netviewer, Cloud.com, RingCube, ShareFile, App-DNA and the Other Acquisition as if the acquisitions had occurred at the beginning of fiscal year 2010 (in thousands, except per share data):

	Year Ended December 31,
	2011		2010
Revenues	$	2,230,318	$	1,917,044
Income from operations	367,396		231,999
Net income	318,159		209,789
Per share - basic	1.70		1.13
Per share - diluted	1.67		1.10

Purchase of Non-Controlling Interest

Kaviza Inc.

The Company presents non-controlling interests of less-than-wholly-owned subsidiaries within the equity section of its consolidated financial statements in accordance with the authoritative guidance for the presentation and disclosure of non-controlling interests of consolidated subsidiaries. In May 2011, the Company acquired all of the non-controlling interest of Kaviza Inc. (“Kaviza”), a provider of virtual desktop infrastructure solutions, for $17.2 million. In addition, the Company also deposited an additional $3.0 million to be held in escrow. As a result of this transaction, the Company has obtained a 100% interest in this subsidiary. In accordance with the authoritative guidance, the excess of the proceeds paid over the carrying amount of the non-controlling interest of Kaviza has been reflected as a reduction of additional paid-in capital. In addition, in connection with the purchase of the non-controlling interest of Kaviza, the Company assumed non-vested stock units which were converted into the right to receive up to 88,687 shares of the Company's common stock and assumed certain stock options which are exercisable for 33,301 shares of the Company's common stock, with existing vesting schedules.

2010 Acquisitions

On September 7, 2010, the Company acquired all of the issued and outstanding securities of VMLogix, Inc. (“VMLogix”), a privately held corporation headquartered in Santa Clara, California. VMLogix is a provider of virtualization management software for private and public cloud computing systems. The total consideration for this transaction was approximately $13.2 million, comprised of approximately $10.4 million in cash, net of cash acquired, and approximately $2.8 million related to VMLogix liabilities settled in conjunction with the acquisition. The source of funds for this transaction consisted of available cash. The Company recorded approximately $6.4 million of goodwill, which is not deductible for tax purposes, and acquired $11.9 million in assets including $7.5 million of identifiable intangible assets, of which $6.2 million is related to product related intangible assets with a useful life of 5.0 years and $1.3 million is related to other intangible assets with a useful life of 4.0 years. The Company assumed liabilities of approximately $5.1 million in conjunction with the acquisition. In addition, the Company also assumed stock options for which the vesting period reset fully upon the closing of the transaction. When these stock options vest, they will be exercisable for up to 47,784 shares of the Company’s common stock. The Company has included the effect of this transaction in its results of operations prospectively from the date of the acquisition, which effect was not material to its consolidated results.

During the first quarter of 2010, the Company acquired two privately-held companies for a total cash consideration of approximately $9.2 million, net of cash acquired. The Company recorded approximately $2.6 million of goodwill, which is not deductible for tax purposes, and acquired $9.4 million in assets including $7.1 million of identifiable intangible assets, of which $6.2 million is related to product related intangible assets with a weighted-average useful life of 5.0 years and $0.9 million is related to other intangible assets with a weighted-average useful life of 2.0 years. In addition, the Company assumed liabilities of approximately $2.8 million in conjunction with the acquisitions. The Company has included the effects of these transactions in its results of operations prospectively from the respective dates of the acquisitions, which effects were not material to its consolidated results.