We reported in May on Google closing the purchase of Motorola Mobility for $12.5 billion as well as the appointment of Dennis Woodside as CEO. Later that month Google filed its 2012 SEC conveniently breaking down what the $12.4 billion was for.
At the time, Larry Page wrote on Google’s blog:
“Many users coming online today may never use a desktop machine, and the impact of that transition will be profound–as will the ability to just tap and pay with your phone. That’s why it’s a great time to be in the mobile business, and why I’m confident Dennis and the team at Motorola will be creating the next generation of mobile devices that will improve lives for years to come.”
At the time of the original acquisition, in August of last year, Google had commented on how Motorola would assist with completion by supercharging the Android ecosystem. Taking a close look at the SEC filing proves just how Google values Motorola’s assets.
-$5.5 billion –“intellectual property”
- $2.9 billion cash acquired
-$2.6 billion “goodwill ”
-$730 million “customer relationships”
$670 million “other net assets acquired.”
The SEC filings also explain how Google came to the magic number of $12.5 billion:
“Under the transaction, we acquired all outstanding common shares of Motorola for $40 per share and all vested Motorola stock options and restricted stock units, for a total purchase price of approximately $12.4 billion in cash.
In addition, we assumed $401 million of unvested Motorola stock options and restricted stock units, which will be recorded as stock-based compensation expense over the weighted-average remaining service periods of approximately 2.9 years. Transaction costs were approximately $50 million, which were recorded as general and administrative expense as incurred.
The fair value of assets acquired and liabilities assumed was based upon a preliminary valuation and our estimates and assumptions are subject to change within the measurement period. The primary areas of the purchase price that are not yet finalized are related to certain legal matters, income taxes, and residual goodwill.
Of the $12.4 billion total purchase price, $2.9 billion was cash acquired, $5.5 billion was attributed to patents and developed technology, $2.6 billion to goodwill, $730 million to customer relationships, and $670 million to other net assets acquired.”
Google has attributed “goodwill” to working relationships that will accompany the acquisition. In a statement
“The goodwill of $2.6 billion is primarily attributed to the synergies expected to arise after the acquisition. The amount of goodwill expected to be deductible for tax purposes is zero.”
Recently the Wall street Journal noted that Google is definitely bolstering is stable of patents, which could be seen as a measure of protection, as the top mobile innovators continue to sue each other.
