XML 34 R22.htm IDEA: XBRL DOCUMENT v3.5.0.2
Divestiture
6 Months Ended
Jul. 31, 2016
Discontinued Operations and Disposal Groups [Abstract]  
Divestiture
Divestiture
In the first quarter of fiscal year 2016, the Company completed its divestiture of its defense and microwave communications infrastructure business to Jariet Technologies, Inc. (“Jariet”) in exchange for an equity interest in that company. For the three months ended July 26, 2015, the defense and microwave communications infrastructure business accounted for $0.2 million in net revenue and non-recurring engineering (“NRE”) reimbursements. For the six months ended July 26, 2015, the defense and microwave communications infrastructure business accounted for $4.3 million in net revenue and NRE reimbursements. This business was part of the Sierra Monolithics, Inc. acquisition completed by the Company in December 2009.
Under the terms of the transaction with Jariet, the Company contributed assets, including inventory and equipment with a net book value of $0.6 million in exchange for an equity interest in the form of preferred stock, representing an approximately 21% voting interest in Jariet. Due to the anticipated continuing cash flows from its investment in Jariet, the Company did not account for the divestiture as a discontinued operation. In addition to the contribution of assets, certain contracts were novated with future performance responsibilities being transferred to Jariet. The investment in Jariet was written off in the third quarter of fiscal year 2016.
On August 5, 2016, the Company completed its divestiture of its Snowbush IP business (previously part of the Company’s Systems Innovation Group) to Rambus for approximately $32.0 million in cash along with the opportunity to receive additional payments from Rambus through 2022 based upon a percentage of sales by Rambus of new products expected to be developed by Rambus from the disposed assets. The Company expects to record a gain of approximately $27.0 million on the disposition of this business in the third quarter of fiscal year 2017. Other than this gain, the divestiture will not have a material impact on the Company’s consolidated financial statements.