HP 2008 Annual Report Download - page 116

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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 6: Acquisitions (Continued)
acquired the remaining outstanding common shares, and Mercury became a wholly owned subsidiary of
HP. This acquisition combined Mercury’s application management, application delivery and IT
governance capabilities with HP’s broad portfolio of management solutions.
The aggregate purchase price of approximately $4.9 billion consisted of cash paid for outstanding
stock, the fair value of stock options assumed and direct transaction costs.
Based on valuations prepared using estimates and assumptions provided by management, the
purchase price allocation as of the date of acquisition has been allocated as follows:
In millions
Cash and short-term investments ........................................... $ 830
Other tangible assets .................................................... 541
Notes payable ......................................................... (303)
Other liabilities assumed. ................................................. (954)
Total net assets ....................................................... 114
Amortizable intangible assets .............................................. 1,079
Goodwill ............................................................. 3,480
IPR&D .............................................................. 181
Total purchase price. .................................................... $4,854
HP has included Mercury within the HP Software segment. The amortizable intangible assets are
being amortized on a straight-line basis over their estimated useful lives as follows:
Weighted-
average
In millions useful life
Technology ................................................... $ 592 4.2 years
Customer relationships .......................................... 243 7.0 years
Maintenance contracts ........................................... 239 6.8 years
Trademarks ................................................... 5 6.0 years
Total amortizable intangible assets .................................. $1,079 5.4 years
Opsware Acquisition
On September 17, 2007, HP completed its tender offer for Opsware Inc. (‘‘Opsware’’), a leader in
data center automation, and acquired more than 90% of Opsware’s common shares for cash
consideration of $14.25 per share. On September 21, 2007, HP acquired all remaining outstanding
Opsware shares. Opsware has been integrated into the HP Software segment.
The aggregate purchase price of approximately $1.7 billion consisted of cash paid for outstanding
stock, the fair value of stock options assumed and direct transaction costs. In connection with this
acquisition, HP recorded approximately $1.3 billion of goodwill and $249 million of amortizable
intangible assets. HP is amortizing the purchased intangibles on a straight-line basis over a weighted-
average estimated life of 5.0 years. HP did not record any IPR&D in connection with the Opsware
acquisition.
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