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Acquisitions | 12 Months Ended
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Dec. 31, 2016
Acquisitions |
Acquisitions | 8. Acquisitions Micrium On October 3, 2016, the Company acquired Micrium, a private company. Micrium is a supplier of real-time operating system (RTOS) software for the IoT. The Company acquired Micrium for approximately $12.4 million, consisting of approximately $8.2 million in cash and $4.2 million in stock consideration. An additional approximately $1.0 million in stock consideration was accounted for as a transaction separate from the business combination based on its economic substance and will be recorded as post-combination compensation expense over four years. Approximately $1.5 million of the consideration was held in escrow as security for breaches of warranties and certain other expressly enumerated matters. The purchase price was allocated as follows: intangible assets—$9.5 million; goodwill—$3.4 million; and other net assets—$(0.5) million. A portion of the goodwill is deductible for tax purposes. The allocation of the purchase price is preliminary and subject to change, primarily for the valuation of certain assets and accruals and the finalization of income tax matters. Accordingly, adjustments may be made to the values of the assets acquired and liabilities assumed as additional information is obtained about the facts and circumstances that existed at the valuation date. Pro forma information related to this acquisition has not been presented because it would not be materially different from amounts reported. The Company recorded approximately $0.3 million of acquisition-related costs in selling, general and administrative expenses during fiscal 2016. Telegesis On November 20, 2015, the Company acquired Telegesis (UK) Limited, a limited liability company incorporated in England and Wales. Telegesis is a supplier of wireless mesh networking modules based on the Company's zigbee and Thread technology, targeting applications in the smart energy, home automation and industrial automation markets. The Company acquired Telegesis for cash consideration of $19.9 million. Approximately $2.9 million of the consideration was held in escrow as security for breaches of warranties and certain other expressly enumerated matters. The Company believes that this strategic acquisition accelerates its roadmap for zigbee and Thread modules. This factor contributed to a purchase price that was in excess of the fair value of the net assets acquired and, as a result, the Company recorded goodwill. The goodwill is not deductible for tax purposes. The purchase price was allocated as follows (in thousands):
|  | Amount |  | Weighted-Average Amortization Period (Years)
--- | --- | --- | --- | ---
Intangible assets: |  |  |  |  |
In-process research and development |  | $ | 10 |  | Not amortized
Developed technology |  |  | 4,980 |  | 7
Customer relationships |  |  | 2,000 |  | 3
Trademarks |  |  | 400 |  | 3
​ | ​ | ​ | ​ | ​ | ​
|  |  | 7,390 |  |
Cash and cash equivalents |  |  | 717 |  |
Other current assets |  |  | 4,545 |  |
Goodwill |  |  | 9,344 |  |
Other non-current assets |  |  | 131 |  |
Current liabilities |  |  | (689 | ) |
Non-current deferred tax liabilities |  |  | (1,508 | ) |
​ | ​ | ​ | ​ | ​ | ​
Total purchase price |  | $ | 19,930 |  |
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Pro forma information related to this acquisition has not been presented because it would not be materially different from amounts reported. The Company recorded approximately $0.5 million of acquisition-related costs in selling, general and administrative expenses during fiscal 2015. Bluegiga On January 30, 2015, the Company acquired Bluegiga Technologies Oy, a private company based in Finland. Bluegiga is a provider of Bluetooth Smart, Bluetooth Classic and Wi-Fi modules and software stacks for a multitude of applications in the IoT, industrial automation, consumer electronics, automotive, retail, residential, and health and fitness markets. The Company acquired Bluegiga for cash consideration of approximately $58.0 million. The Company believes that this strategic acquisition will accelerate its entry into the wireless module market. This factor contributed to a purchase price that was in excess of the fair value of the net assets acquired and, as a result, the Company recorded goodwill. The goodwill is not deductible for tax purposes. The purchase price was allocated as follows (in thousands):
|  | Amount |  | Weighted-Average Amortization Period (Years)
--- | --- | --- | --- | ---
Intangible assets: |  |  |  |  |
In-process research and development |  | $ | 5,710 |  | Not amortized
Developed technology |  |  | 12,190 |  | 8
Customer relationships |  |  | 6,670 |  | 4
Trademarks |  |  | 880 |  | 3
​ | ​ | ​ | ​ | ​ | ​
|  |  | 25,450 |  |
Cash and cash equivalents |  |  | 1,132 |  |
Other current assets |  |  | 6,156 |  |
Goodwill |  |  | 34,597 |  |
Other non-current assets |  |  | 208 |  |
Current liabilities |  |  | (3,289 | ) |
Non-current deferred tax liabilities |  |  | (3,780 | ) |
Long-term debt |  |  | (2,232 | ) |
Other non-current liabilities |  |  | (220 | ) |
​ | ​ | ​ | ​ | ​ | ​
Total purchase price |  | $ | 58,022 |  |
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In-process research and development (IPR&D) represents acquired technology that had not achieved technological feasibility as of the acquisition date and had no alternative future use. The IPR&D recorded in connection with the acquisition of Bluegiga consisted primarily of Bluetooth Smart Ready and Bluetooth Smart modules and software stacks. The fair value of these technologies was determined using the income approach. The discount rate applicable to the cash flows was 16.1%. Pro forma information related to this acquisition has not been presented because it would not be materially different from amounts reported. The Company recorded approximately $1.2 million of acquisition-related costs in selling, general and administrative expenses during fiscal 2015. Energy Micro On July 1, 2013, the Company acquired Energy Micro. In the first quarter of 2015, the Company made the following payments in connection with the Energy Micro acquisition: (a) approximately $20.0 million was paid for the release of the holdback; and (b) approximately $6.3 million was paid for the first annual period of the earn-out. Approximately $1.8 million of the earn-out payment was recorded as compensation expense during fiscal 2014. The remaining approximately $4.5 million of the earn-out payment represented additional consideration. On March 11, 2016, the Company entered into an agreement with Energy AS, the former parent of Energy Micro. The agreement settled the amount of the earn-out to be paid for fiscal 2015 through 2018. The total settlement amount was approximately $16.0 million (in lieu of potential payments of up to $26.7 million) and was paid on May 11, 2016. The settlement amount represented approximately $11.4 million of additional consideration and approximately $4.6 million of compensation expense (of which approximately $2.7 million was recorded in fiscal 2016 and approximately $1.9 million was recorded in fiscal 2015). The compensation expense recorded in fiscal 2016 was offset in part by a gain of approximately $2.7 million to adjust the consideration portion of the earn-out to fair value due to the settlement.

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