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Acquisitions
12 Months Ended
Dec. 31, 2014
Business Combinations [Abstract]  
ACQUISITIONS
ACQUISITIONS
Discera, Inc.

On August 30, 2013, the Company signed a definitive agreement to acquire specific net assets of Discera, Inc. (“Discera”), a private company based in San Jose, California, which qualifies as an acquisition of a business for financial accounting purposes. The acquisition closed on September 9, 2013. The total cash consideration was approximately $7.2 million, plus $1.1 million of assumed liabilities. Of the $7.2 million, $6.1 million was paid upon closing, and $1.1 million was withheld to secure the indemnification obligations from the closing date through September 9, 2014, which was included in restricted cash on the consolidated balance sheet at December 31, 2013. The Company paid $1.0 million of the restricted cash in the second half of 2014. The objective of the acquisition is to complement and expand Micrel’s high performance clock and timing product portfolio, as well as expand its MEMS (micro-electrical mechanical systems) capabilities. The addition of the Discera MEMS product line will also enhance Micrel’s MEMS presence, intellectual property and capability. The Company has included the financial results of Discera in its consolidated financial statements beginning on the acquisition date. Pro forma financial disclosures are not presented herein as the financial results of this acquisition are considered immaterial.

During the first quarter of 2014, goodwill recorded from the Discera transaction was increased by approximately $0.1 million to $2.6 million and the purchase price allocation was completed.
Identifiable intangible assets
Fair values for the acquired developed technology, customer relationships, trademarks and non-competition agreements and in-process research and development (“IPR&D”) were determined based on various methods including excess earnings method, relief from royalty method and with-or-without method. The values of the developed technology and customer relationships are amortized over an estimated useful life of ten and three years, respectively. The non-competition agreements are amortized over one year. The values of trademarks are amortized over ten years.
The fair value of the acquired IPR&D was determined through estimates and valuation techniques applied to the projected cash flows of the acquired research projects. As it was determined that the underlying projects had not reached technological feasibility at the date of acquisition, the amounts allocated to IPR&D will not be amortized to expense until completion of the related projects. Upon the completion of development for each project, the acquired IPR&D will be amortized over its useful life. The Company expects to complete these projects and begin to amortize the related IPR&D assets in 2015.
PhaseLink Company Limited

On April 2, 2012, the Company acquired a controlling interest in PhaseLink Company Limited (“PhaseLink”), a private company based in Taiwan and in San Jose, California. The Company acquired approximately 95% of the outstanding shares of PhaseLink for $19.7 million in cash ($16.4 million net of cash acquired). On December 20, 2012, the Company acquired the remaining 5% noncontrolling interest in cash ($0.9 million) that resulted in 100% ownership in PhaseLink. The objective of the acquisition is to complement Micrel’s high performance clock generation products, add distribution products for the communications market and to expand its product offerings into the consumer and industrial markets. In addition, the Company expects the acquisition to enhance its technology portfolio and further expand its research and development capabilities. The Company has included the financial results of PhaseLink in its consolidated financial statements beginning on the acquisition date of April 2, 2012. Pro forma financial disclosures are not presented herein as the financial results of this acquisition are considered immaterial.

Identifiable intangible assets

Fair values for the acquired developed technology, customer relationships, trademarks and non-competition agreements and IPR&D were determined based on various methods including excess earnings method, relief from royalty method and with-or-without method. The values of the developed technology and customer relationships are amortized over an estimated useful life of 10 years. The non-competition agreements are amortized over a two-year period. The values of trademarks are amortized over two to five years.

The fair value of the acquired IPR&D was determined through estimates and valuation techniques based on the terms and details of the acquisition. As it was determined that the underlying projects had not reached technological feasibility at the date of acquisition, the amounts allocated to IPR&D will not be expensed until completion of the related projects. Upon the completion of development for each project, the acquired IPR&D will be amortized over its useful life. The Company expects to complete these projects and begin to amortize the related IPR&D assets in 2015.