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Acquisitions
 12 Months Ended
Aug. 31, 2012
Acquisitions  
Acquisitions

 

4. Acquisitions

        Acquisition of SBDI—On April 1, 2010, the Company, through a wholly owned subsidiary, acquired 100% of the outstanding shares of SBDI for total cash consideration of $933 thousand. The Company expensed acquisition-related costs in the amount of $15 thousand. The acquisition was accounted for as a business combination using the acquisition method of accounting. Because the purchase price was less than the fair value of the acquired net assets of SBDI, the Company recognized a gain on the acquisition of $349 thousand through other income.

        The Company recognized revenues of $92 thousand and net loss of $282 thousand from the operations of SBDI in the consolidated statements of operations for the year ended August 31, 2010. The following table presents the Company's unaudited pro forma results as if the acquisition of SBDI had been completed at the beginning of fiscal 2010 (in thousands, except per share data):

 
   Year Ended
August 31,
2010 		 

Revenues, net

   $ 35,981  

Net income

   $ 10,226  

Net income per share attributable to SemiLEDs common stockholders, basic and diluted

   $ 0.28  

        The unaudited pro forma financial information above is presented for comparative purposes only and is not necessarily indicative of what would have occurred had the acquisition of SBDI been completed as of the beginning of fiscal 2010, nor is it necessarily indicative of future consolidated results.

        Acquisition of Ning Xiang—On August 3, 2011, the Company, through a wholly owned subsidiary, acquired 51% of the outstanding shares of Ning Xiang for total cash consideration of $3.5 million. The Company expensed acquisition related costs in the amount of $53 thousand. Ning Xiang is engaged in the design, development, manufacturing, marketing and sale of lighting fixtures and systems. The Company acquired 51% ownership interest in Ning Xiang for strategic reasons and, among other things, to assist with market intelligence.

        The acquisition was accounted for as a business combination using the acquisition method of accounting. Accordingly, the results of Ning Xiang are included in the Company's consolidated financial statements from the date of acquisition. The allocation of the purchase price was based upon a valuation that was completed in October 2011. Goodwill in the amount of $1.1 million was recognized and consists largely of the synergies expected to result from the consolidation of the operations of the Company and Ning Xiang. All of the goodwill was assigned to the Ning Xiang reporting unit. None of the goodwill recognized is expected to be deductible for income tax purposes.

        The following table summarizes the consideration paid for Ning Xiang and the amounts of estimated fair value of assets acquired and liabilities assumed at the date of acquisition, as well as the fair value of the noncontrolling interests in Ning Xiang at the acquisition date (in thousands):

 
   August 3,
2011 		 

Current assets

   $ 3,661  

Plant and equipment

     166  

Other assets

     11  

Customer relationships

     1,379  

Patents

     24  

Current liabilities

     (1,257 )
       

Total identifiable net assets acquired

     3,984  

Noncontrolling interests in Ning Xiang

     (1,607 )

Goodwill

     1,106  
       

Total cash purchase price

   $ 3,483  
       

        The allocated fair values required management of the Company to make significant estimates and assumptions, especially with respect to the fair value of the intangible assets being acquired.

        The Company recognized revenues of $426 thousand and net loss of $47 thousand from the operations of Ning Xiang in the consolidated statements of operations for the year ended August 31, 2011. The following table presents the Company's unaudited pro forma results as if the acquisition of Ning Xiang had been completed at the beginning of each period presented (in thousands, except per share data):

 
   Years Ended
August 31, 		 
 
   2011   2010  

Revenues, net

   $ 36,855   $ 38,105  

Net income (loss)

   $ (16,702 ) $ 11,058  

Net income (loss) per share attributable to SemiLEDs common stockholders, basic

   $ (0.90 ) $ 0.27  

Net income (loss) per share attributable to SemiLEDs common stockholders, diluted

   $ (0.90 ) $ 0.26  

        The above unaudited pro forma information does not reflect any incremental direct costs, including any restructuring charges to be recorded in connection with the acquisition, or any potential cost savings that may result from the consolidation of certain operations of the Company or Ning Xiang. Accordingly, the unaudited pro forma financial information above is presented for comparative purposes only and is not necessarily indicative of what would have occurred had the acquisition of Ning Xiang been completed as of the beginning of each of the periods being presented, nor is it necessarily indicative of future consolidated results.