Acquisition | 9 Months Ended |
Jun. 30, 2014 |
Business Combinations [Abstract] | ' |
Acquisition | ' |
Acquisitions |
Acquisition of DMS |
On April 30, 2014, the Company acquired all the outstanding stock of Dynamic Micro Systems Semiconductor Equipment GmbH (“DMS”), a German provider of automated contamination control solutions for front opening unified pod, or "FOUP," carriers and reticle storage, targeted at improving yield of semiconductor processes at semiconductor fabrication plants. The Company paid, in cash, aggregate merger consideration of $33.9 million, which consisted of a $31.0 million purchase price and a $5.9 million preliminary working capital adjustment offset by $3.0 million of cash acquired. The preliminary working capital payment will be adjusted in the Company’s fourth quarter of fiscal year 2014 to reflect the actual working capital acquired under the terms of the purchase agreement. The acquisition of DMS expands the Company’s capabilities at semiconductor fabrication plants for yield improvement on new technology nodes. |
The Company recorded the assets and liabilities associated with DMS at their fair values as of the acquisition date. The preliminary amounts recorded were as follows (in thousands): |
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Accounts receivable | $ | 15,262 | | | | | | | | | | | | | |
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Inventory | 10,126 | | | | | | | | | | | | | |
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Prepaid and other current assets | 2,727 | | | | | | | | | | | | | |
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Property, plant and equipment | 2,145 | | | | | | | | | | | | | |
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Completed technology | 3,610 | | | | | | | | | | | | | |
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Customer relationships | 7,100 | | | | | | | | | | | | | |
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Goodwill | 15,375 | | | | | | | | | | | | | |
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Accounts payable | (10,393 | ) | | | | | | | | | | | | |
Accrued liabilities | (7,120 | ) | | | | | | | | | | | | |
Deferred revenue | (996 | ) | | | | | | | | | | | | |
Long-term deferred tax liabilities | (3,968 | ) | | | | | | | | | | | | |
Total purchase price, net of cash acquired | $ | 33,868 | | | | | | | | | | | | | |
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In performing the purchase price allocation, the Company considered, among other factors, its intention for future use of the acquired assets, analyses of the acquired business's historical financial performance, and estimates of future cash flows from DMS’s products and services. The purchase price was allocated based upon the fair value of the identified assets acquired and liabilities assumed as of the acquisition date from a market participant’s perspective. The Company has not yet completed the final allocation of the consideration paid in connection with the acquisition of DMS with respect to certain aspects of the working capital acquired, the fair value of the intangible assets and deferred taxes, but expects to complete the final allocation within the measurement period. |
The Company used the relief-from-royalty method, a form of the income approach, to value the completed technology acquired. The principle behind this method is that the value of an intangible asset is equal to the present value of the after-tax royalty savings attributable to owning that intangible asset. The Company used the excess-earnings method, a form of the income approach, to value the customer relationship acquired. The principle behind this method is that the value of the intangible asset is equal to the present value of the after-tax cash flows attributable to the intangible asset only. The weighted average amortization periods for intangible assets acquired in the DMS acquisition are 5.0 years for completed technologies and 8.0 years for customer relationships. The intangible assets acquired will be amortized using methods that approximate the pattern in which the economic benefits are expected to be realized, including variable declining balance and straight-line methods. |
Goodwill represents the excess of the consideration transferred over the net assets acquired and has been assigned to the Company's Brooks Product Solutions segment. Goodwill is primarily the result of expected synergies from combining the operations of DMS with the Company. Goodwill arising from the acquisition of DMS is not deductible for tax purposes. |
The operating results of DMS have been included in the results of operations for the Brooks Product Solutions segment from the date of the acquisition. Revenue from DMS for the three months ended June 30, 2014 was $1.0 million and the net loss was $1.8 million. The net loss for the three months ended June 30, 2014 includes charges to expense the step-up in value of the acquired inventories which increased the net loss by $0.1 million, amortization of acquired intangible assets of $0.4 million and restructuring charges of $0.3 million. |
The following pro forma summary presents consolidated information of the Company as if the acquisition of DMS occurred on October 1, 2012 (in thousands): |
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| Three Months Ended | | Nine Months Ended |
June 30, | June 30, |
| 2014 | | 2013 | | 2014 | | 2013 |
Revenue | $ | 119,580 | | | $ | 116,903 | | | $ | 379,433 | | | $ | 336,539 | |
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Net income (loss) attributable to Brooks Automation, Inc. | 21,291 | | | 1,320 | | | 26,384 | | | (10,927 | ) |
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The pro forma net income (loss) has been adjusted to reflect additional amortization from adjustments to intangible assets as if those adjustments had been applied as of October 1, 2012. |
Acquisition of Matrical |
On August 1, 2013, the Company acquired certain assets and assumed certain liabilities of Matrical, Inc.’s ("Matrical") life science businesses (collectively “the Acquired Assets”) for cash consideration of approximately $9.3 million, net of cash acquired. The acquisition of the Acquired Assets provides the Company with the opportunity to enhance its existing product offerings in biobanking and sample management. |
The Company recorded the assets and liabilities associated with the purchase of the Acquired Assets at their fair values as of the acquisition date. The amounts recorded were as follows (in thousands): |
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Accounts receivable | $ | 636 | | | | | | | | | | | | | |
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Inventory | 2,095 | | | | | | | | | | | | | |
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Prepaid and other current assets | 103 | | | | | | | | | | | | | |
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Property, plant and equipment | 534 | | | | | | | | | | | | | |
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Completed technology | 500 | | | | | | | | | | | | | |
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Customer relationships | 1,500 | | | | | | | | | | | | | |
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Goodwill | 7,076 | | | | | | | | | | | | | |
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Debt | (902 | ) | | | | | | | | | | | | |
Accounts payable | (294 | ) | | | | | | | | | | | | |
Deferred revenue | (351 | ) | | | | | | | | | | | | |
Customer deposits | (1,249 | ) | | | | | | | | | | | | |
Other current liabilities | (322 | ) | | | | | | | | | | | | |
Total purchase price, net of cash acquired | $ | 9,326 | | | | | | | | | | | | | |
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In performing the purchase price allocation, the Company considered, among other factors, analyses of historical financial performance, its intention for future use of the Acquired Assets, and estimates of future cash flows from the Acquired Assets. The purchase price was allocated based upon the fair value of the identified assets acquired and liabilities assumed as of the acquisition date from a market participant’s perspective. |
The Company used the relief-from-royalty method to value the completed technology and the excess-earnings method to value the customer relationships. The weighted-average amortization periods are 4.6 years for completed technologies and 7.0 years for customer relationships. The intangible assets acquired will be amortized using the straight-line method because it approximates the pattern in which the economic benefits are expected to be realized. |
Goodwill represents the excess of the purchase price over the fair values of the net tangible and intangible assets acquired and is primarily the result of expected synergies from combining the Matrical products with the Company's other life science products. The goodwill resulting from this acquisition has been assigned to our Brooks Life Science Systems segment Goodwill arising from the acquisition of the Acquired Assets is deductible for tax purposes. |
The operating results of the Acquired Assets have been included in the results of operations for the Brooks Life Science Systems segment from the date of acquisition. |
The Company completed the final allocation of the purchase price related to the Acquired Assets in the first quarter of fiscal year 2014. Prior to finalizing the purchase price allocation in the first quarter of fiscal year 2014, the Company made an adjustment to reduce the fair value of deferred revenue acquired in the acquisition and goodwill by $61,000. |
Acquisition of Crossing |
On October 29, 2012, the Company acquired all the outstanding stock of Crossing Automation Inc. (“Crossing”), a U.S. based provider of automation solutions and services primarily to global semiconductor front-end markets. The Company paid, in cash, an aggregate merger consideration of $59.0 million net of cash acquired. The acquisition of Crossing provides the Company with the opportunity to enhance its existing capabilities with respect to manufacturing of atmospheric and vacuum automation solutions within the semiconductor front-end market. |
The Company recorded the assets and liabilities associated with Crossing at their fair values as of the acquisition date. The amounts recorded were as follows (in thousands): |
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Accounts receivable | $ | 5,356 | | | | | | | | | | | | | |
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Inventory | 8,668 | | | | | | | | | | | | | |
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Prepaid expenses | 1,968 | | | | | | | | | | | | | |
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Property, plant and equipment | 2,270 | | | | | | | | | | | | | |
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Completed technology | 10,530 | | | | | | | | | | | | | |
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Customer relationships | 20,010 | | | | | | | | | | | | | |
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Goodwill | 26,453 | | | | | | | | | | | | | |
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Other long term assets | 885 | | | | | | | | | | | | | |
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Accounts payable | (3,024 | ) | | | | | | | | | | | | |
Accrued liabilities | (5,172 | ) | | | | | | | | | | | | |
Deferred revenue | (319 | ) | | | | | | | | | | | | |
Other current liabilities | (388 | ) | | | | | | | | | | | | |
Other long-term liabilities | (8,232 | ) | | | | | | | | | | | | |
Total purchase price, net of cash acquired | $ | 59,005 | | | | | | | | | | | | | |
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In performing the purchase price allocation, the Company considered, among other factors, its intention for future use of the acquired assets, analyses of historical financial performance, and estimates of future cash flows from Crossing’s products and services. The purchase price was allocated based upon the fair value of the identified assets acquired and liabilities assumed as of the acquisition date from a market participant’s perspective. |
The Company used the relief-from-royalty method to value the completed technology and the excess-earnings method to value the customer relationships. The weighted-average amortization periods are 7.7 years for completed technologies and 8.0 years for customer relationships. The intangible assets acquired will be amortized using methods that approximate the pattern in which the economic benefits are expected to be realized, including variable declining balance and straight-line methods. |
Goodwill represents the excess of the consideration transferred over the net assets acquired and has been assigned to our Brooks Product Solutions and Brooks Global Services segments. Goodwill is primarily the result of expected synergies from combining the operations of Crossing with the Company. Goodwill arising from the acquisition of Crossing is not deductible for tax purposes. |
The operating results of Crossing have been included in the results of operations for the Brooks Product Solutions and Brooks Global Services segments from the date of acquisition. |
The Company completed the final allocation of the purchase price related to Crossing in the fourth quarter of fiscal year 2013. |