Well, I've got to admit that I've been quite curious about the financial statements of privately held Pure Digital (i.e. Flip) before its March 2009 acquisition by Cisco.
So here they are for your inquiring mind:
Privately held Pure Digital (i.e. Flip) financial statements: 2005 and 2006
Privately held Pure Digital (i.e. Flip) financial statements: 2006 and 2007
Pure Digital (i.e. Flip) Net Sales and Operating Income (Loss)
2005
2006
2007
2008
January 2009
Net Sales
$2,319,320
$75,316,114
$64,096,837
$145,554,000
$8,778,000
Operating Income (Loss)
(-40,699,591)
(-9,203,161)
(-9,616,773)
10,423,000
776,000
Timeline of the Pure Digital (i.e. Flip) acquisition by Cisco:
In July 2008, Cisco and Pure Digital began a series of discussions regarding a potential partnership between Cisco and Pure Digital. The possibitlity of a potential acquisition of Pure Digital by Cisco was briefly raised as part of these initial discussions.
On August 4, 2008, Cisco and Pure Digital executed a non-disclosure agreement. From time to time between July and December 2008, Pure Digital and Cisco held discussions on various potential strategic transactions, including potential partnering transactions and an acquisition.
On December 17, 2008, during a meeting with Jonathan Kaplan, Pure Digital's Chief Executive Officer, Cisco provided several reasons for its interest in Pure Digital, including leveraging an acquisition of Pure Digital as a way to further expand Cisco's efforts and brand in the consumer market, as well as obtaining technological capabilities in consumer video applications.
On January 6 and January 7, 2009, Cisco and Pure Digital met to discuss valuation methods generally, and to engage in limited preliminary due diligence.
On January 27, 2009, several Cisco representatives attended a series of meetings with Pure Digital to discuss Pure Digital's finances, product marketing and product roadmap.
On February 9, 2009, Cisco made an initial verbal offer for the acquisition of Pure Digital, which Pure Digital rejected on February 10, 2009, and communication between the companies ceased.
On February 18, 2009, Cisco made a new offer to acquire Pure Digital and subsequently provided a non-binding term sheet with principal terms of Cisco's proposed acquisition of Pure Digital.
On February 19, 2009, the Pure Digital board of directors met to disuss the proposed acquisition of Pure Digital by Cisco.
On February 26, 2009, after review and negotiation of the non-binding term sheet, the Pure Digital board of directors held a special meeting to approve a letter agreement obligating Pure Digital to negotiate exclusively with Cisco for 45 days following the execution of such exclusivity letter agreement and authorizing the officers of Pure Digital to negotiate a definitive acquisition agreement substantially in accordance with the terms presented to the Pure Digital board of directors. Pure Digital and Cisco then entered into the exclusivity letter agreement, Cisco began its due diligence review of Pure Digital, and the parties continued discussions regarding the proposed transaction.
On March 4, 2009, Cisco provided an initial draft of the definitive Merger Agreement to Pure Digital, and the parties negotiated the terms of the Merger Agreement and several related agreements through March 18, 2009.
On March 9, 2009, Cisco provided a form of key employment agreement to certain Pure Digital officers, and such individuals and Cisco negotiated the terms of the key employment agreements and several related agreements through March 18, 2009 (view the employment agreement).
On March 17, 2009, Pure Digital's legal counsel, Gunderson Dettmer Stough Villeneuve Frankly and Hachigian, LLP, discussed with the Pure Digital board of directors a summary and analysis of the material terms and conditions of the proposed Merger. In addition, Pure Digital's legal counsel briefed each member of the Pure Digital board of directors of his fiduciary duties in connection with the proposed Merger. Following such briefing, the Pure Digital board of directors discussed the terms of the Merger, including the overall valuation of Pure Digital, key employment aggrangements, escrow terms and indemnification provisions. After such discussion, the Pure Digiral board of directors unanimously authorized Pure Digital to enter into the Merger Agreement and recommended to the stockholders of Pure Digital that the Merger Agreement be adopted and the Merger approved.
Later on March 18, 2009, (i) Cisco and Pure Digital entered into the Merger Agreement, (ii) Cisco and certain Pure Digital stockholders entered into voting agreements and (irrevocable proxies page 11) which require such Pure Digital stockholders, among other things, to vote all of the shares of Pure Digital captial stock held of record by them in favor of the Merger, and, (iii) Cisco and certain Pure Digital officers entered into key employment agreements and (non-competition agreements - page 17 PDF, page 16 document) which will become effective upon the closing of the Merger.
View the reasons Cisco gave for acquiring Pure Digital (i.e. Flip) and the reasons Pure Digital gave for allowing Cisco to acquire it.
On March 19, 2009, Cisco announced it would acquire Pure Digital (i.e. Flip) for $590 million in Cisco stock.
I calculated that the "true acquisition cost" of Pure Digital (i.e. Flip) was actually $747 million in Cisco shareholder cash.
On April 12, 2011, Cisco announced that it was closing down the Pure Digital (i.e. Flip) business.
