XML 24 R11.htm IDEA: XBRL DOCUMENT
v3.23.2

Acquisitions | 12 Months Ended
--- | ---
Jun. 24, 2023
Business Combinations [Abstract] |
Acquisitions | 4. Acquisitions Asset Acquisition During the third quarter of fiscal 2023, we completed the acquisition of certain developed technology intangible assets from Broadcom for an aggregate consideration of $30.0 million, which was paid in cash in the previous fiscal year. This transaction did not meet the definition of a business combination as substantially all of the fair value of the gross assets acquired was concentrated in the finite-lived developed technology intangible asset. As a result, this transaction was accounted for as an asset acquisition and the total purchase consideration was allocated to intangible assets, amortized over an estimated useful life of six years. Emza Visual Sense, Ltd. On October 25, 2022, we acquired all of the outstanding shares of Emza Visual Sense, Ltd., or Emza, a developer of ultra-low-power artificial intelligence visual sensing solutions, for total purchase consideration of $15.8 million. The purchase price was attributed to $0.3 million cash acquired, $8.0 million of intangible assets, $9.8 million of goodwill and $2.3 million net liabilities assumed. Goodwill recognized from the acquisition of Emza is not deductible for income tax purposes. Pro forma results of operations for this acquisition have not been presented because they are not material to our consolidated results of operations, either individually or in the aggregate. DSP Group, Inc. On August 30, 2021, we entered into an agreement and plan of merger with DSP Group, Inc., or DSPG, to acquire all of the equity of DSPG, a leading global provider of voice and wireless chipset solutions for converged communications, for $22.00 per share in an all-cash transaction, referred to as the DSPG acquisition. The DSPG acquisition closed on December 2, 2021, or the DSPG Closing Date, whereupon we obtained voice and wireless technology and product solutions for converged communications. In addition, under the terms of the agreement and plan of merger, we provided replacement equity awards to the transferred employees and allocated $1.7 million of the replacement equity awards value to consideration transferred. The DSPG acquisition has been accounted for using the purchase method of accounting in accordance with the business acquisition guidance. Under the purchase accounting method, the total estimated purchase consideration of the acquisition was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their relative fair values. The excess of the purchase consideration over the net tangible and identifiable intangible assets acquired and liabilities has been recorded as goodwill. Our estimate of the fair values of the acquired intangible assets at June 25, 2022, was based on established and accepted valuation techniques performed with the assistance of our third-party valuation specialists. The adjusted purchase price paid for DSPG was $543.3 million. The final purchase price allocation is as follows (in millions):
|  | Final As Adjusted June 25, 2022 |
Cash and cash equivalents |  | $ | 40.5 |
Short-term investments |  |  | 71.9 |
Accounts receivable, net |  |  | 12.9 |
Inventory |  |  | 22.6 |
Prepaid expenses and other current assets |  |  | 4.0 |
Property and equipment |  |  | 5.9 |
Intangible assets |  |  | 212.0 |
Right-of-use lease asset |  |  | 9.8 |
Severance pay fund |  |  | 16.2 |
Deferred tax asset |  |  | 6.7 |
Non-current other assets |  |  | 2.3 |
Total identifiable assets acquired |  |  | 404.8 |
Accounts payable |  |  | (6.7 | )
Other accrued expenses |  |  | (19.8 | )
Short-term lease liabilities |  |  | (1.5 | )
Long-term lease liabilities |  |  | (8.2 | )
Accrued severance |  |  | (16.4 | )
Deferred tax liability |  |  | (39.4 | )
Other long-term liabilities |  |  | (6.1 | )
Total liabilities |  |  | (98.1 | )
Net identifiable assets acquired |  |  | 306.7 |
Goodwill |  |  | 236.6 |
Net assets acquired |  | $ | 543.3 |
There were no measurement period adjustments during fiscal 2023. The following table summarizes the estimated fair value of the intangible assets as of the DSPG Closing Date (in millions):
|  | Estimated Weighted Average Useful Lives in Years |  |  | Estimated Fair Value |
Developed technology |  |  | 5.2 |  |  | $ | 150.0 |
Customer contracts and related relationships |  |  | 4.0 |  |  |  | 45.0 |
In process research and development |  | N/A |  |  |  | 16.0 |
Trade names |  |  | 1.0 |  |  |  | 1.0 |
Estimated fair value of acquired intangibles |  |  |  |  | $ | 212.0 |
We estimated the fair value of the identified intangible assets using a discounted cash flow model for each of the underlying identified intangible assets. These fair value measurements were based on significant inputs not observable in the market and thus represent a Level 3 measurement. Key assumptions include the level and timing of expected future cash flows, conditions and demands specific to each intangible asset over its remaining useful life, and discount rates we believe to be consistent with the inherent risks associated with each type of asset, which range from 4% to 18%. The fair value of these intangible assets is primarily affected by the projected revenue, gross margins, operating expenses, the technology migration curve, customer ramp up period and the anticipated timing of the projected income associated with each intangible asset coupled with the discount rates used to derive their estimated present values. We believe the level and timing of expected future cash flows appropriately reflects market participant assumptions. In-process research and development consists of advanced semiconductor telecommunications products for the Internet of Things, or IoT, market. We expect to complete the in-process research and development project in calendar year 2024. The value of goodwill reflects the anticipated synergies of the combined operations and workforce of DSPG as of the DSPG Closing Date. None of the goodwill is expected to be deductible for income tax purposes. Prior to the DSPG acquisition, we did not have an existing relationship or transactions with DSPG. The consolidated financial statements include approximately $83.8 million of revenue from the DSPG Closing Date through June 2022. It is impracticable to determine the effect on net income attributable to DSPG as we completed the integration of DSPG into our ongoing operations during the third quarter of fiscal 2022. In fiscal year 2022, we incurred $4.4 million in acquisition related costs which were recorded in selling, general and administrative expense in the consolidated statements of operations. In December 2021, we executed the Term Loan Facility agreement in the amount of $600.0 million, the proceeds of which were used to finance the DSPG acquisition and we incurred $11.2 million of debt financing costs thereon. As of June 2023, $6.0 million of the Term Loan Facility is included in short-term debt, and $585.0 million is included in long-term debt on the accompanying consolidated balance sheets. See “Note 8 – Debt” for additional information. Supplemental Pro Forma Information (Unaudited) The supplemental pro forma financial information presented below is for illustrative purposes only and is not necessarily indicative of the financial position or results of operations that would have been realized if the acquisition had been completed on the date indicated, does not reflect synergies that might have been achieved, nor is it indicative of future operating results or financial position. The pro forma adjustments are based upon currently available information and certain assumptions we believe are reasonable under the circumstances. The following supplemental pro forma information presents the combined results of operations as if DSPG had been acquired as of the beginning of fiscal 2021. Pro forma adjustments used to arrive at pro forma net income included adjustments for the addition of intangible amortization expense for the value of intangibles under the purchase price allocation, adjustments to record acquired inventories at fair value, transaction and restructuring costs. The total pro forma adjustments for fiscal 2022 was an increase to net income of $5.9 million and a decrease in net income of $86.3 million in fiscal 2021. The unaudited supplemental pro forma financial information for the periods presented is as follows (in millions):
|  | 2022 |  |  | 2021 |
Revenue |  | $ | 1,802.6 |  |  | $ | 1,466.0 |
Net income (loss) |  | $ | 263.4 |  |  | $ | (6.7 | )

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration