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Acquisitions and Discontinued operations
6 Months Ended
Dec. 29, 2018
Discontinued Operations and Disposal Groups  
Discontinued operations

3. Acquisitions and Discontinued operations

 

Acquisition of Softweb Solutions

 

In December 2018, the Company acquired Softweb Solutions (“Softweb”) a privately held software and artificial intelligence company that delivers software solutions for Internet of Things (IoT) applications and systems designed to increase efficiency, speed time to market, and help businesses transform. The impact of this acquisition was not material to the Company’s consolidated balance sheets or statements of operations and as a result, the Company has not disclosed the preliminary allocation of purchase price or the pro-forma impact of the acquisition.

 

Discontinued Operations

 

In February 2017, the Company completed the sale of its Technology Solutions business (“TS business”) to Tech Data Corporation (the “Buyer”). The TS business and the financial impacts of the divestiture are classified as discontinued operations in all periods presented. In August 2018, the Company executed a settlement agreement with the Buyer resulting in a final adjustment of $120.0 million and a final geographic allocation of the TS business sales price for tax reporting purposes. This incremental consideration received from the sale of the TS business as well as cash settlements from the resolution of indemnification claims and other cash reimbursements have been classified as cash flow from discontinued operations investing activities.  Income tax payments related to the gain on sale of the TS business have been classified as cash flow from discontinued operations operating activities.

 

In connection with the sale of the TS business, the Company entered into a Transition Services Agreement (“TSA”), pursuant to which the Buyer will pay the Company to provide certain information technology, distribution, facilities, finance and human resources related services for various periods of time depending upon the services not to exceed approximately two years from the closing date. Expenses incurred by the Company to provide such services under the TSA are classified within selling, general and administrative expenses and amounts billed to the Buyer to provide such services are classified as a reduction of such expenses. As of December 29, 2018, the Buyer has formally terminated all TSA services. 

 

Under the contractual terms of the sale of the TS business, the Company has indemnified the Buyer for certain liabilities including income and other tax related matters, which may result in future indemnification payments to the Buyer depending upon the outcome of those matters subject to indemnification.