Business Combinations and Investments, Goodwill and Acquired Intangible Assets | 9 Months Ended |
Sep. 29, 2013 |
Business Combinations and Investments, Goodwill and Acquired Intangible Assets [Abstract] | ' |
Business Combinations and Investments, Goodwill and Acquired Intangible Assets | ' |
Business Combinations and Investments, Goodwill and Acquired Intangible Assets |
Teledyne spent $106.4 million and $389.2 million on acquisitions in the first nine months of 2013 and 2012, respectively. |
On August 30, 2013, a subsidiary of Teledyne acquired the assets of SD Acquisition, Inc. d/b/a CETAC Technologies (“CETAC”) for $26.4 million. Teledyne expects to pay a $0.4 million purchase price adjustment in the fourth quarter. CETAC, headquartered in Omaha, Nebraska is a designer and manufacturer of automated sample handling and sample introduction equipment for laboratory instrumentation. CETAC had sales of $24.0 million for its fiscal year ended December 31, 2012, and is part of the Instrumentation segment. |
On July 5, 2013, a subsidiary of Teledyne purchased the remaining 49% interest in Nova Research, Inc. (“Nova Sensors”) that it did not already own for $4.9 million. Nova Sensors is part of the Digital Imaging segment. In the third quarter of 2013, the Company spent $1.4 million on certain assets. |
|
On May 8, 2013, a subsidiary of Teledyne acquired Axiom IC B.V. (“Axiom”), for an initial payment of $4.0 million, net of cash acquired, with an additional $1.3 million expected to be paid in equal installments over three years. Axiom is located in the Netherlands and is a fabless semiconductor company that develops high-performance CMOS mixed-signal integrated circuits and is part of the Digital Imaging segment. |
On March 1, 2013, a subsidiary of Teledyne acquired all the outstanding shares of RESON A/S (“RESON”) for $69.7 million, net of cash acquired. RESON, headquartered in Slangerup, Denmark, provides multibeam sonar systems and specialty acoustic sensors for hydrography, global marine infrastructure and offshore energy operations. RESON had sales of €50.8 million for its fiscal year ended December 31, 2012 and is part of the Instrumentation segment. |
On August 3, 2012, Teledyne acquired LeCroy Corporation (“LeCroy”) for $301.3 million, net of cash acquired. LeCroy, headquartered in Chestnut Ridge, New York is a leading supplier of oscilloscopes, protocol analyzers and signal integrity test solutions. LeCroy is part of the Instrumentation segment. |
Also on August 3, 2012, a subsidiary of Teledyne acquired the parent company of PDM Neptec Limited (“PDM Neptec”) for $7.4 million in cash, net of cash acquired. PDM Neptec, located in Hampshire, United Kingdom, is part of the Instrumentation segment and operates as Teledyne Impulse-PDM Ltd. |
On July 2, 2012, a subsidiary of Teledyne acquired BlueView Technologies Inc. (“BlueView”) for $16.3 million in cash, net of cash acquired. BlueView, located in Seattle, Washington, is part of the Instrumentation segment and operates as Teledyne BlueView, Inc. |
On April 2, 2012, a subsidiary of Teledyne acquired a majority interest in the parent company of Optech Incorporated (“Optech”) for $27.9 million, net of $4.8 million in cash acquired. The purchase increased Teledyne’s ownership percentage to 51 percent from the original 19 percent interest purchased in the first quarter of 2011. With the April 2012 purchase, we now consolidate Optech’s financial results into Teledyne’s results with an appropriate adjustment for the minority ownership. At the time of the purchase, the value of Optech’s total equity was based on the same per share price as those shares purchased by Teledyne to obtain the majority interest in 2012 and the value of the non-controlling interest was 49.0% of Optech’s total equity and was equal to $49.8 million. The minority ownership of Optech was $49.2 million and $49.8 million at September 29, 2013 and December 30, 2012, respectively. Optech is part of the Digital Imaging segment. |
On February 25, 2012, Teledyne acquired VariSystems Inc. (“VariSystems”) for $34.9 million, net of cash acquired. Teledyne paid a $1.4 million purchase price adjustment in the second quarter of 2012. VariSystems, headquartered in Calgary, Alberta, Canada, supplies custom harsh environment interconnects used in energy exploration and production. VariSystems is part of the Digital Imaging segment. |
Teledyne funded the purchases primarily from borrowings under its credit facility and cash on hand. The results of these acquisitions have been included in Teledyne’s results since the dates of the respective acquisitions. |
Teledyne’s goodwill was $1,030.3 million at September 29, 2013 and $990.2 million at December 30, 2012. The increase in the balance of goodwill in 2013 resulted from the CETAC, RESON and Axiom acquisitions partially offset by the impact of exchange rate changes and also reflected a $4.9 million reduction related to a purchase accounting adjustment for the LeCroy acquisition. In the second quarter of 2013, the Company identified an immaterial misstatement in purchase accounting related to the 2012 LeCroy acquisition after the allocation period had ended. The Company increased long term deferred tax assets by $4.9 million and reduced goodwill by the same amount in the second quarter of 2013. Teledyne’s net acquired intangible assets were $274.2 million at September 29, 2013 and $265.7 million at December 30, 2012. The increase in the balance of acquired intangible assets in 2013 primarily resulted from the CETAC and RESON acquisitions, partially offset by amortization and the impact of exchange rate changes. The Company’s cost to acquire CETAC, RESON and Axiom has been allocated to the assets acquired and liabilities assumed based upon their respective fair values as of the date of the completion of the acquisition. The differences between the fair value of the consideration paid and the estimated fair value of the assets and liabilities acquired has been recorded as goodwill. The Company has completed the process of specifically identifying the amounts assigned to assets and liabilities and acquired intangible assets and the related impact on goodwill for the RESON and Axiom acquisitions. The Company is still in the process of specifically identifying the amount to be assigned to certain liabilities and the related impact on taxes and goodwill for the CETAC acquisition. The Company made preliminary estimates as of September 29, 2013, since there was insufficient time between the acquisition date and the end of the period to finalize the analysis. |
The following is a summary at the acquisition date of the estimated fair values allocated to the assets acquired and liabilities assumed for the acquisitions made in 2013, excluding the purchase of the remaining 49% interest in Nova Sensors. (in millions): |
| |
| | | | |
Current assets | $ | 36 | | |
|
Property, plant and equipment | 5.8 | | |
|
Goodwill | 50.6 | | |
|
Acquired intangible assets | 32.8 | | |
|
Current liabilities | (18.7 | ) | |
Long-term liabilities | (5.0 | ) | |
Net assets acquired | $ | 101.5 | | |
|
Except for the CETAC acquisition, goodwill resulting from the acquisitions made in 2013 and 2012 will not be deductible for tax purposes. |
The following table is a summary at the acquisition date of the acquired intangible assets and weighted average useful life in years for the acquisitions made in 2013, excluding the purchase of the remaining 49% interest in Nova Sensors (dollars in millions): |
|
| | | | |
| Amount | Weighted Average Useful Life in Years |
Intangibles subject to amortization: | | |
Proprietary Technology | $ | 13.6 | | 9.4 |
|
Customer List/Relationships | 8.6 | | 12 |
|
Backlog | 0.6 | | 0.7 |
|
Total intangibles subject to amortization | 22.8 | | 10.1 |
|
Intangibles not subject to amortization: | | |
Trademarks and trade names | 10 | | n/a |
|
Total intangibles not subject to amortization | 10 | | |
|
Total acquired intangible assets | $ | 32.8 | | |
|
| | | | | |