ACQUISITION

On June 23, 2015, the Company completed its acquisition of Orad Hi-Tech Systems Ltd. (“Orad”), an Israeli company listed on the Frankfurt Stock Exchange. Each issued and outstanding share of Orad common stock was canceled and converted into the right to receive consideration equal to €5.67 in cash, representing total consideration paid of $66.0 million based on the exchange rate on the date of closing, net of estimated cash acquired. As a result of the acquisition, the Company incurred merger and integration cost of approximately $4.3 million, which was recorded as general and administrative expenses in the Company’s statement of operations. Orad provides 3D real-time graphics, video servers and related asset management solutions. The acquisition adds content creation and media management solutions to the Avid MediaCentral Platform.

The following table summarizes the preliminary purchase price allocation to the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition (in thousands). The Company is continuing to collect information, refine preliminary valuations with additional information, and evaluate the fair value of the assets and liabilities acquired, and related tax effects. As a result, adjustments to the values presented below may be made over the next several quarters.



Cash	$	7,477
Accounts receivable, net	9,004
Inventories	4,810
Other current assets	1,092
Property and equipment	1,338
Identifiable intangible assets	37,200
Long-term deferred tax assets, net	2,636
Other assets	3,457
Goodwill	33,905
Total assets acquired	100,919

Accounts payable	(1,395		)
Accrued expenses and other current liabilities	(7,045		)
Deferred revenue and deposits	(5,154		)
Long-term deferred tax liabilities, net	(9,942		)
Other long-term liabilities	(3,939		)
Total liabilities assumed	(27,475		)
Net assets acquired	$	73,444

The purchase price allocation resulted in goodwill of approximately $33.9 million, which is primarily not deductible for tax purposes. The goodwill is attributable to expected synergies from combining the operations of Orad with the Company and intangible assets that do not qualify for separate recognition, such as an assembled workforce. The following are the identifiable intangible assets acquired and their respective weighted average useful lives, as determined based on preliminary valuations (dollars in thousands):



	Weighted Average Life (Years)	Amount
Core and completed technology	4	$	31,200
Customer relationships	4	5,800
Trade name	1	200
Total		$	37,200

The estimated fair value of intangible assets was determined using the excess earnings method for technology, replacement cost method for customer relationships and relief from royalty method for trade name.

Pro Forma Financial Information for Acquisition of Orad (in thousands except per share data, unaudited)

The results of operations of Orad have been included in the results of operations of the Company since June 23, 2015, the date of acquisition. As the acquisition was completed on June 23, 2015, the results of operations for Orad that are included in the Company’s consolidated statements of operations from the date of acquisition were not significant for the three and six month periods ended June 30, 2015. The following unaudited pro forma financial information presents the Company’s results of operations for the three and six months ended June 30, 2015 and 2014 as if the acquisition of Orad had occurred at the beginning of 2014. The pro forma financial information for the combined entities has been prepared for comparative purposes only and is not indicative of what actual results would have been if the acquisition had taken place at the beginning of fiscal 2014, or of future results.



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	(in thousands, except per share data)
	2015		2014		2015		2014
Net revenues	115,862		134,845		245,805		279,130

Net (loss) income	(10,083	)	(4,901	)	(11,915	)	2,299

Net (loss) income per share:
Basic and Diluted	(0.25	)	(0.13	)	(0.30	)	0.06