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Business Acquisition | 6 Months Ended
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Jun. 30, 2017
Business Acquisition, Pro Forma Information [Abstract] |
Business Acquisition | BUSINESS ACQUISITION On February 29, 2016, the Company, through its wholly-owned subsidiary Harmonic International AG, completed its acquisition of 100% of the share capital and voting rights of TVN, a global leader in advanced video compression solutions headquartered in Rennes, France, for a final purchase price of $82.5 million in cash. The Company believes that its acquisition of TVN has strengthened, and will continue to strengthen, the Company’s competitive position in the video infrastructure market as well as to enhance the depth and scale of the Company’s research and development and service and support capabilities in the video arena. During the fourth quarter of 2016, the Company completed the accounting for this business combination. The final TVN purchase price has been allocated to tangible and intangible assets acquired and liabilities assumed on the basis of their respective estimated fair values on the acquisition date. The Company’s allocation of TVN purchase consideration is as follows (in thousands):
Assets: |
Cash and cash equivalents | $ | 6,843 |
Accounts receivable, net | 14,933 |
Inventories | 3,462 |
Prepaid expenses and other current assets | 2,412 |
Property and equipment, net | 9,942 |
French R&D tax credit receivables (1) | 26,421 |
Other long-term assets | 2,134 |
Total assets | $ | 66,147 |
Liabilities: |
Other debts and capital lease obligations, current | 8,362 |
Accounts payable | 12,494 |
Deferred revenue | 2,504 |
Accrued and other current liabilities | 18,365 |
Other debts and capital lease obligations, long-term | 16,087 |
Other non-current liabilities | 6,467 |
Deferred tax liabilities | 2,126 |
Total liabilities | $ | 66,405 |
Goodwill | 41,670 |
Intangibles | 41,100 |
Total purchase consideration | $ | 82,512 |
(1) See Note 8, “Balance Sheet Components-Prepaid expenses and other current assets” for more information on French R&D tax credit receivables. The following table presents details of the intangible assets acquired through this business combination (in thousands, except years):
| Estimated Useful Life (in years) |  | Fair Value
Backlog | 6 months |  | $ | 3,600 |
Developed technology | 4 years |  | 21,700 |
Customer relationships | 5 years |  | 15,200 |
Trade name | 4 years |  | 600 |
|  |  | $ | 41,100 |
The goodwill is not expected to be deductible for income tax purposes but the intangibles assets acquired are expected to be deductible for income tax purposes in certain jurisdictions. Both goodwill and intangibles assets acquired are assigned to the Company’s video reporting unit. Acquisition- and integration-related expenses As a result of the TVN acquisition, the Company incurred acquisition-and integration-related expenses and the amounts are summarized in the table below (in thousands):
| Acquisition-related |  | Integration-related
| Three months ended |  | Six months ended |  | Three months ended |  | Six months ended
| July 1, 2016 |  | June 30, 2017 |  | July 1, 2016 |  | June 30, 2017 |  | July 1, 2016
Product cost of revenue | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 433 |  |  | $ | 342 |  |  | $ | 491 |
Research and development | — |  |  | — |  |  | — |  |  | 500 |  |  | 7 |  |  | 550 |
Selling, general and administrative | 885 |  |  | 3,321 |  |  | 467 |  |  | 1,585 |  |  | 2,268 |  |  | 2,137 |
Total acquisition- and integration-related expenses | $ | 885 |  |  | $ | 3,321 |  |  | $ | 467 |  |  | $ | 2,518 |  |  | $ | 2,617 |  |  | $ | 3,178 |
These costs consisted of acquisition-related costs which include outside legal, accounting and other professional services as well as integration-related costs which include incremental costs resulting from the TVN acquisition that are not expected to generate future benefits once the integration is fully consummated. These costs are expensed as incurred. The Company expects to continue to have some TVN integration-related costs throughout the remainder of 2017, primarily outside legal and advisory fees relating to re-organization of TVN’s legal entities. Pro Forma Financial Information The following unaudited pro forma summary presents consolidated information of the Company as if the acquisition of TVN had occurred on January 1, 2015, the beginning of the comparable prior annual period. The unaudited pro forma combined results are provided for illustrative purpose only and are not indicative of the Company’s actual consolidation results. The pro forma adjustments primarily relate to the amortization of acquired intangibles and interest expense related to financing arrangements. In addition, the unaudited pro forma net loss for the three and six months ended July 1, 2016 was adjusted to exclude $6.5 million of acquisition- and integration- related expenses, respectively. These adjustments exclude the income tax impact.
| Six months ended
| July 1, 2016
(in millions, except per share amounts) |
Net revenue | $ | 200.1 |
Net loss | (40.3 | )
Net loss per share-basic and diluted | $ | (0.52 | )

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- 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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1497-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1490-128463 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1392-128463 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7008-128479 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1486-128463 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6927-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4845-128472 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1524-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7000-128479 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4922-128472 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4934-128472 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4926-128472 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=73530397&loc=SL65897772-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1383-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6996-128479 + Details
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