On November 5, 2019, the Company completed the acquisition of Avera, the ASIC business of GlobalFoundries. Avera is a leading provider of ASIC semiconductor solutions. The Company acquired Avera to expand its ASIC design capabilities. Total purchase consideration consisted of cash consideration paid to GlobalFoundries of $593.5 million, net of working capital and other adjustments. The purchase consideration was funded with new debt financing. See “Note 12 - Debt” for additional information. An additional $90 million in cash will be paid to acquire additional assets if certain conditions are satisfied within the next 10 months.

The factors contributing to the recognition of goodwill were based upon the Company's conclusion that there are strategic and synergistic benefits that are expected to be realized from the acquisition. A portion of the goodwill recorded for the Avera acquisition is deductible for tax purposes.


Inventories	$	106,465
Prepaid expenses and other current assets	17,495
Property and equipment, net	25,677
Acquired intangible assets, net	379,000
Other non-current assets	6,870
Goodwill	129,392
Accrued liabilities	(64,155)
Deferred tax liabilities	(6,594)
Other non-current liabilities	(650)
	$	593,500

On September 19, 2019, the Company completed the acquisition of Aquantia. Aquantia is a manufacturer of high-speed transceivers which includes copper and optical physical layer products. The Company acquired Aquantia to further its position in automotive in-vehicle networking and strengthen its multi-gig ethernet PHY portfolio for enterprise infrastructure, data center and access applications. In accordance with the terms of the Agreement and Plan of Merger dated May 6, 2019, by and among the Company and Aquantia (the “Aquantia merger agreement”), the Company acquired all outstanding shares of common stock of Aquantia (the “Aquantia shares”) for $13.25 per share in cash. The merger consideration was funded with a combination of cash on hand and funds from the Company's revolving line of credit (“Revolving Credit Facility”). See “Note 12 - Debt” for additional information.


Cash consideration to Aquantia common stockholders	$	479,547
Cash consideration - director, employee & consultant grant accelerations and payout for employee stock purchase plan	7,122
Stock consideration for replacement equity awards attributable to pre-combination service	15,520
Total merger consideration	$	502,189

The merger consideration allocation set forth herein is preliminary and may be revised with adjustment to goodwill as additional information becomes available during the measurement period of up to 12 months from the closing date of the acquisition to finalize such preliminary estimates. Any such revisions or changes may be material.

The factors contributing to the recognition of goodwill were based upon the Company's conclusion that there are strategic and synergistic benefits that are expected to be realized from the acquisition. Goodwill recorded for the Aquantia acquisition is not expected to be deductible for tax purposes.

On July 6, 2018, the Company completed the acquisition of Cavium (the “Cavium acquisition”). Cavium is a provider of highly integrated semiconductor processors that enable intelligent processing for wired and wireless infrastructure and cloud for networking, communications, storage and security applications. The Cavium acquisition was primarily intended to create an opportunity for the combined company to emerge as a leader in infrastructure solutions. In accordance with the terms of the Agreement and Plan of Merger, dated as of November 19, 2017, by and among the Company and Cavium (the “Cavium merger agreement”), the Company acquired all outstanding shares of common stock of Cavium (the “Cavium shares”) for $40.00 per share in cash and 2.1757 shares of the Company's common stock exchanged for each share of Cavium stock. The Company also made cash payments for the fractional shares that resulted from conversion as specified in the Cavium merger agreement. The merger consideration was funded with a combination of cash on hand, new debt financing and issuance of the Company’s common shares. See “Note 12 - Debt” for discussion of the debt financing.


Cash consideration to Cavium common stockholders	$	2,819,812
Common stock (153,376,408 shares of the Company's common stock at $21.34 per share)	3,273,053
Cash consideration for intrinsic value of vested director stock options and employee accelerated awards attributable to pre-acquisition service	10,642
Stock consideration for employee accelerated awards attributable to pre-acquisition service	7,804
Fair value of the replacement equity awards attributable to pre-acquisition service	50,485
Total merger consideration	$	6,161,796

The factors contributing to the recognition of goodwill were based upon the Company's conclusion that there are strategic and synergistic benefits that are expected to be realized from the acquisition. Goodwill of $3.5 billion recorded for the Cavium acquisition is not expected to be deductible for tax purposes.


Cash and cash equivalents	$	180,989
Accounts receivable	112,270
Inventories	330,778
Prepaid expense and other current assets	19,890
Assets held for sale	483
Property and equipment	115,428
Acquired intangible assets	2,744,000
Other non-current assets	89,139
Goodwill	3,498,196
Accounts payable	(52,383)
Accrued liabilities	(126,007)
Accrued employee compensation	(34,813)
Deferred income	(2,466)
Current portion of long-term debt	(6,123)
Liabilities held for sale	(3,032)
Long-term debt	(600,005)
Non-current income taxes payable	(8,454)
Deferred tax liabilities	(79,995)
Other non-current liabilities	(16,099)
Total merger consideration	$	6,161,796

In fiscal year 2019, the Company incurred total acquisition related costs of $53.7 million which were recorded in selling, general and administrative expense in the consolidated statements of operations. The Company also incurred $22.8 million of debt financing costs. Additionally, the Company incurred $2.9 million of equity issuance costs, which were recorded in additional paid-in capital in the consolidated balance sheet.

The unaudited 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 acquisitions 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 the Company believe are reasonable under the circumstances.

The following unaudited supplemental pro forma information presents the combined results of operations for each of the periods presented, as if Avera and Aquantia had been acquired as of the beginning of fiscal year 2019 and Cavium had been acquired as of the beginning of fiscal year 2018. The unaudited supplemental pro forma information includes adjustments to amortization and depreciation for acquired intangible assets and property and equipment, adjustments to share-based compensation expense, the purchase accounting effect on inventories acquired, interest expense, and transaction costs. For fiscal year 2019, nonrecurring pro forma adjustments directly attributable to the Avera and Aquantia acquisitions included (i) the purchase accounting effect of inventories acquired of $73.1 million for Avera and Aquantia (ii) transaction costs of $18.6 million for Avera and Aquantia and (iii) share-based compensation expense of $3.5 million for Aquantia. The unaudited supplemental pro forma information presented below is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the Avera and Aquantia acquisitions actually occurred at the beginning of fiscal year 2019 and the Cavium acquisition actually occurred at the beginning of fiscal year 2018 or of the results of our future operations of the combined business.