Acquisitions

9 Months Ended

Mar. 29, 2025

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Asset Acquisition

During the first quarter of fiscal 2024, we paid an aggregate consideration of $130.0 million to Avago Technologies International Sales PTE, Limited, a subsidiary of Broadcom Inc. (“Broadcom”), to license four developed technology products and to extend the exclusivity period of certain developed technologies that were previously licensed from Broadcom in July 2020. As of March 2025, we have obtained control of three of the four technology products and the three-year extension period to exclusively license previously acquired developed technology intangible assets. The fair value of the remaining technology product of $42.5 million for which we have not yet obtained control is an advance payment on intangible assets and is presented within other non-current assets in our condensed consolidated balance sheets.

Broadcom Mobile Android Wi-Fi Business

On January 19, 2025, we entered into definitive asset purchase agreements with Broadcom to acquire certain assets and obtain non-exclusive licenses relating to, Broadcom’s existing Mobile Android Wi-Fi Business in the IoT market, for an aggregate consideration of $198.0 million in cash, which closed on January 30, 2025, or the Closing Date. These assets include non-exclusive licenses to three developed technology products and right to obtain license of eight roadmap technology intangible assets expected to be delivered at various dates through September 2027. We also entered into transition agreements with Broadcom, under which both parties will provide one another with certain transition services (including one year inventory supply agreement in which Broadcom will facilitate Synaptics to place purchase orders with respective suppliers) following the Closing Date. We acquired these set of assets from Broadcom in order to solidify our leadership position for end-to-end AI Internet of Things (IoT) connectivity and expand our ability to service the Android™ ecosystem.

The 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 identifiable intangible assets acquired and long term assets for roadmap IP based on their relative fair values. The excess of the purchase consideration over the identifiable intangible assets acquired and long term assets has been recorded as goodwill. Our estimate of the fair values of the acquired intangible assets and long term assets at the Closing Date was based on established and accepted valuation techniques performed with the assistance of our third-party valuation specialists. Additional information, which existed as of the acquisition date but is yet unknown to us, may become known to us during the remainder of the measurement period, which will not exceed 12 months from the Closing Date. Changes to amounts recorded as acquired intangible assets and other long term assets will be recorded as adjustments to the provisional amounts recognized as of the Closing Date and may result in a corresponding adjustment to goodwill in the period in which new information becomes available.

The following table summarizes the adjusted purchase price (in millions):


Cash	$	198.0
Adjustments to consideration transferred	47.6
Total purchase consideration	$	245.6

Under the terms of the asset purchase agreement, we provided replacement equity compensation awards to the transferred employees. We determined $47.6 million of value related to these arrangements should be included as consideration transferred.

The following table summarizes the amounts recorded for the estimated fair values of the assets acquired and liabilities assumed as of the Closing Date (in millions):


Long-term assets for product roadmap intellectual properties	$	96.8
Acquired intangible assets	85.2
Goodwill	52.3
Deferred tax asset	11.3
Net assets acquired	$	245.6

We estimated the fair value of the identified intangible assets and long term assets for roadmap intellectual properties, or IPs, using a discounted cash flow model, for each of the underlying identified assets except for in-process research and development, or IPR&D, which was estimated using replacement cost method. 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 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 ranges from 5.8% - 10.5%. The fair value of these assets is primarily affected by the projected revenue, gross margins, operating expenses, the expected technological obsolescence, probability of securing future customer contracts for next generation devices and the anticipated timing of the projected income associated with each 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.

Long term assets for roadmap IPs represent a prepayment for eight technology products to be received in the future. This prepayment is classified under non-current other assets in our condensed consolidated balance sheets. Upon obtaining control of the developed technologies, the amounts recorded will be reclassified as intangible assets based on their respective fair values determined as of the Closing Date.

The following table summarizes the estimate of the intangible assets as of the Closing Date (in millions):


	Estimated Weighted Average Useful Lives in Years	Estimated Fair Value
Developed technology	3.0	$	24.5
Customer contract and related relationships	8.0	27.9
Favorable component of supply contract	1.0	19.0
Order backlog	1.0	7.0
IPR&D	7.0	6.8
Estimated fair value of acquired intangibles		$	85.2

The value of goodwill reflects the anticipated synergies of the expected benefits from future generations of acquired IP and workforce of the transferred assets as of the Closing Date. As of March 2025, approximately $16.0 million of the goodwill is expected to be deductible for income tax purposes.

The condensed consolidated financial statements include approximately $12.8 million of revenue from the Closing Date through March 2025. It is impracticable to determine the effect on net income attributable to the acquisition as we had integrated a substantial portion of the acquisition into our ongoing operations at the close.

We determined it is impractical to include pro forma information given the difficulty in obtaining the historical financial information for the acquisition as the business was part of Broadcom and did not have discrete financial information prior to the acquisition. Inclusion of such information would require us to make estimates and assumptions regarding the acquired business historical financial results that we believe may ultimately prove inaccurate.