Acquisitions

12 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Acquisitions

5.      Acquisitions

MVP

In January 2016, we purchased the assets of MVP Laboratories, Inc. (“MVP”). MVP was a developer, manufacturer and marketer of livestock vaccines vaccine, adjuvants and other products. We acquired all of the assets and assumed certain liabilities used in MVP’s business, including working capital, intellectual property, manufacturing equipment, real property and facilities. The purchase price of approximately $46,576 was paid in cash primarily at closing. We incurred $618 in transaction expenses in connection with the acquisition, which are included in selling, general and administrative expenses.

The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations. Pro forma information giving effect to the acquisition has not been provided because the results are not material to the consolidated financial statements. The fair values of the acquired assets and liabilities as of the acquisition date were:

Working capital, net	$	4,914
Property, plant and equipment		4,774
Definite-lived intangible assets		28,380
Goodwill		8,508
Net assets acquired	$	46,576

We may further refine the determination of certain assets during the measurement period. The definite-lived intangible assets relate to developed products and will be amortized over an estimated useful life of 15 years. The business is included in the Animal Health segment and the goodwill is deductible for tax purposes.

MJB

In January 2015, we entered into multiple agreements with MJ Biologics, Inc. (“MJB”). The agreements provided for exclusivity to license, manufacture and distribute certain animal vaccine products, as well as collaboration on the development of animal vaccines with MJB. Unless otherwise terminated due to material breach or bankruptcy, the agreements are anticipated to continue until the expected January 1, 2021 closing date (the “Closing” or the “Closing Date”) of the purchase of intellectual property and certain other assets comprising MJB’s business relating to animal vaccines.

Under the terms of the Purchase Agreement, we made an upfront payment to MJB of  $5,000 and agreed to pay MJB a “Closing Payment” at Closing in an amount to be calculated based on the worldwide net sales of MJB’s vaccines for the twelve months immediately prior to the Closing Date. The Closing Payment will not be less than $10,000, subject to offset in certain limited circumstances. Acquisition-related accrued interest for this contingent liability was $1,476 for the year ended June 30, 2016.

The acquisition was accounted for as a business combination in accordance with ASC 805. Pro forma information giving effect to the acquisition was not provided because the results were not material to the consolidated financial statements. We recorded intangible assets of  $9,156, including $7,577 of technology-related assets and $1,579 of IPR&D. The definite-lived intangible assets relate to developed products and will be amortized over an estimated useful life of 15 years. We recorded a long-term liability of  $4,156, net of the upfront payment. The long-term liability is payable at the Closing Date and over a subsequent earn-out period. The Closing Payment will also include $5,040 (pro-rated on a monthly basis), conditional upon continuing service of a key employee through January 2018; this amount is being recognized as compensation expense over the service period. Acquisition-related accrued compensation was $1,680 for the year ended June 30, 2016. The business is included in the Animal Health segment.