On September 17, 2019, the Company acquired Hangzhou Anow Microfiltration Co., Ltd. (Anow), a filtration company for diverse industries including semiconductor, pharmaceutical, and medical. Anow reports into the Microcontamination Control segment of the Company. The acquisition was accounted for under the acquisition method of accounting and the results of Anow are included in the Company’s consolidated financial statements as of and since September 17, 2019. Costs associated with the acquisition of Anow were $2.5 million for the year ended December 31, 2019 and were expensed as incurred. These costs are included in selling, general and administrative expenses in the Company’s consolidated statement of operations. The acquisition does not constitute a material business combination.

The purchase price for Anow is $72.8 million, net of cash acquired. The purchase price includes (1) cash consideration of $73.0 million, or $69.3 million net of cash acquired, which was funded from the Company’s existing cash on hand and (2) $3.5 million deferred payment due to the seller at no earlier than September 18, 2021 at which time either the seller or the Company can exercise its option to receive the deferred payment.

The purchase price of Anow exceeds the net of the acquisition-date fair value of the identifiable assets acquired and the liabilities assumed by $47.7 million. Cash flows used to determine the purchase price included strategic and synergistic benefits (investment value) specific to the Company, which resulted in a purchase price in excess of the fair value of identifiable net assets. This additional investment value resulted in goodwill, which is expected to be non-deductible for income tax purposes.

The following table summarizes the provisional allocation of the purchase price to the fair values assigned to the assets acquired and liabilities assumed at the date of the acquisition and adjusted as of December 31, 2019.



(In thousands):	As of September 17, 2019			As of December 31, 2019
Trade accounts and note receivable, net	$	3,455		$	3,455
Inventories, net	4,242			4,459
Other current assets	202			794
Property, plant and equipment	8,863			8,257
Identifiable intangible assets	42,179			18,949
Right-of-use assets	—			2,328
Other noncurrent assets	1,565			74
Accounts payable and accrued liabilities	(1,814		)	(5,022		)
Short-term lease liability	—			(88		)
Long-term lease liability	—			(107		)
Deferred tax liabilities	(10,890		)	(4,742		)
Other noncurrent liabilities	—			(3,270		)
Net assets acquired	47,802			25,087
Goodwill	25,212			47,711
Total purchase price, net of cash acquired	$	73,014		$	72,798

The Company recognized the following finite-lived intangible assets as part of the acquisition of Anow:



(In thousands)	Amount		Weighted average life in years
Developed technology	$	7,370	6.5
Trademarks and trade names	2,197		8.0
Customer relationships	9,382		13.0
	$	18,949	10.0

The final valuation of assets acquired and liabilities assumed is expected to be completed as soon as possible, but no later than one year from the acquisition date. The allocation of the purchase price to the assets acquired and liabilities assumed is complete with the exception of the value allocated to income tax accounts and intangible assets. To the extent that the Company's estimates require adjustment, the Company will modify the values.

On July 15, 2019, the Company acquired MPD Chemicals (MPD), a provider of advanced materials to the specialty chemical, technology, and life sciences industries. MPD reports into the Specialty Chemicals and Engineered Material segment of the Company. The acquisition was accounted for under the acquisition method of accounting and the results of MPD are included in the Company’s consolidated financial statements as of and since July 15, 2019. Costs associated with the acquisition of MPD were $4.0 million for the year ended December, 2019 and were expensed as incurred. These costs are included in selling, general and administrative expense in the Company’s consolidated statement of operations. The acquisition does not constitute a material business combination.

The purchase price for MPD is $161.0 million, net of cash acquired. The purchase price includes (1) cash consideration of $156.5 million (subject to revision for customary working capital adjustments), which was funded from the Company’s existing cash on hand, and (2) a fixed deferred payment of $5.0 million that is due on January 15, 2022, recorded at $4.5 million, which represents the fair value of this fixed deferred payment as of the acquisition date.

The fair value of the fixed deferred payment was determined by taking the present value of this fixed deferred payment based on the term and a discount factor. The fixed deferred payment is reflected in pension benefit obligations and other liabilities in the Company’s consolidated balance sheets.

The purchase price of MPD exceeds the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed by $61.9 million. Cash flows used to determine the purchase price included strategic and synergistic benefits (investment value) specific to the Company, which resulted in a purchase price in excess of the fair value of identifiable net assets. This additional investment value resulted in goodwill, which is expected to be deductible for income tax purposes.



(In thousands):	As of July 15, 2019			As of December 31, 2019
Trade accounts and note receivable, net	$	3,575		$	3,575
Inventories, net	21,899			8,689
Other current assets	318			313
Property, plant and equipment	14,571			11,465
Identifiable intangible assets	74,900			79,390
Right-of-use assets	3,677			3,621
Accounts payable and accrued liabilities	(2,440		)	(2,419		)
Short-term lease liability	(144		)	(88		)
Long-term lease liability	(4,016		)	(4,016		)
Other noncurrent liabilities	(1,416		)	(1,416		)
Net assets acquired	110,924			99,114
Goodwill	51,457			61,870
Total purchase price, net of cash acquired	$	162,381		$	160,984

The Company recognized the following finite-lived intangible assets as part of the acquisition of MPD:



(In thousands)	Amount		Weighted average life in years
Developed technology	$	12,750	11.0
Trademarks and trade names	620		2.0
Customer relationships	66,020		17.0
	$	79,390	16.0

On March 8, 2019, the Company acquired Digital Specialty Chemicals Limited (DSC), a Toronto, Canada-based provider of advanced materials to the specialty chemical, technology, and pharmaceutical industries. DSC reports into the Specialty Chemicals and Engineered Materials segment of the Company. The acquisition was accounted for under the acquisition method of accounting and the results of operations of DSC are included in the Company’s consolidated financial statements as of and since March 8, 2019. Costs associated with the acquisition of DSC were $2.1 million for the fiscal year ended December 31, 2019 and were expensed as incurred. These costs are included in selling, general and administrative expense in the Company’s consolidated statements of operations. The acquisition does not constitute a material business combination.

The purchase price for DSC is $64.1 million, net of cash acquired. The purchase price includes (1) cash consideration of $49.9 million, or $49.4 million net of cash acquired, which was funded from the Company’s existing cash on hand, (2) a fixed deferred payment of $16.1 million that is due on March 31, 2022, recorded at $14.0 million representing the fair value of this fixed deferred payment as of the acquisition date, and (3) an earnout-based contingent consideration of $0.7 million based on the operating performance of DSC for a twelve-month period ended March 31, 2021.

Upon closing the acquisition, the Company recorded a contingent consideration obligation of $0.7 million, which represents the fair value of the earnout-based contingent consideration. This amount was estimated based on a Black Scholes model. Subsequent changes in the fair value of this obligation will be recognized as adjustments to the contingent consideration obligation and reflected within the Company’s consolidated statements of operations.

On December 3, 2019, the Company entered into a settlement agreement to accelerate the fixed deferred payment of $16.1 million to no later than March 8, 2020. The Company adjusted the fair value of the fixed deferred payment from its fair value to the full value resulting in an additional $1.6 million charge to interest expense in the consolidated income statement and the liability was adjusted from other long-term liabilities to other accrued liabilities. In addition the acceleration of the fixed deferred payment, it was determined the earnout-based contingent consideration of $0.7 million will never become owed to the sellers under the original purchase agreement. The Company removed the liability and credited selling, general and administrative expenses in the consolidated income statement.

The purchase price of DSC exceeds the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed by $36.5 million. Cash flows used to determine the purchase price included strategic and synergistic benefits (investment value) specific to the Company, which resulted in a purchase price in excess of the fair value of identifiable net assets. This additional investment value resulted in goodwill, which is expected to be non-deductible for income tax purposes.

The following table summarizes the allocation of the purchase price to the fair values assigned to the assets acquired and liabilities assumed at the date of the acquisition and as adjusted as of December 31, 2019:



(In thousands):	As of March 8, 2019			December 31, 2019
Trade accounts and note receivable, net	$	1,840		$	1,840
Inventories, net	5,523			4,307
Other current assets	1,389			1,437
Property, plant and equipment	16,791			16,654
Identifiable intangible assets	7,976			6,870
Right-of-use assets	79			79
Deferred tax asset	1,104			1,066
Other noncurrent assets	—			28
Accounts payable and accrued liabilities	(2,461		)	(2,861		)
Deferred tax liabilities	(2,861		)	(1,802		)
Long-term lease liability	(37		)	(37		)
Net assets acquired	29,343			27,581
Goodwill	35,133			36,540
Total purchase price, net of cash acquired	$	64,476		$	64,121

During the year ended December 31, 2019, the Company finalized its fair value determination of the assets acquired and liabilities assumed. The valuation of the assets acquired and liabilities assumed was based on the information that was available as of the acquisition date, and the expectations and assumptions that have been deemed reasonable by the Company’s management.

On June 26, 2019, the Company acquired Flex Concepts, Inc. (Flex), a technology company focused on single-use fluid handling bags, tubing manifolds and hardware for the life sciences industry. Flex reports into the Advanced Materials Handling segment of the Company. The purchase price of Flex was for cash consideration of $1.9 million. The transaction was accounted for under the acquisition method of accounting and the results of operations of Flex are included in the Company’s consolidated financial statements since June 26, 2018. The acquisition does not constitute a material business combination.

During the year ended December 31, 2018, the Company finalized its fair value determinations of the assets acquired and liabilities assumed. The valuation of the assets acquired and liabilities assumed was based on the information that was available as of the acquisition date and the expectations and assumptions that have been deemed reasonable by the Company’s management.

On June 25, 2018, the Company acquired the SAES Pure Gas business (SPG), from SAES Getters S.p.A. for approximately $352.7 million in cash, or $341.5 million net of cash acquired, funded from the Company’s existing cash on hand. The acquisition was accounted for under the acquisition method of accounting and the results of operations of SPG are included in the Company’s consolidated financial statements as of and since June 25, 2018. Direct costs of $4.8 million associated with the acquisition of SPG, consisting mainly of professional and consulting fees, were expensed as incurred for the year ended December 31, 2018. These costs are included in selling, general and administrative expense in the Company’s consolidated statements of operations.

SPG, based in San Luis Obispo, California, is a leading provider of high-capacity gas purification systems used in semiconductor manufacturing and adjacent markets, and reports into the Microcontamination Control segment of the Company. This acquisition expanded the gas purification solutions portfolio in our Microcontamination Control segment with high-capacity products suited for bulk chemical purification applications.



(In thousands):	As of June 30, 2018			As of December 31, 2019
Trade accounts and notes receivable, net	$	15,805		$	19,173
Inventories, net	46,073			42,758
Other current assets	424			706
Property, plant and equipment, net	7,345			6,653
Identifiable intangible assets	178,220			150,430
Deferred tax asset	—			734
Other noncurrent assets	398			12
Current liabilities	(26,196		)	(26,473		)
Deferred tax liabilities	(42,110		)	(35,271		)
Other noncurrent liabilities	(1,006		)	(1,412		)
Net assets acquired	178,953			157,310
Goodwill	162,251			184,180
Total purchase price, net of cash acquired	$	341,204		$	341,490

The fair value of acquired inventories of $42.8 million is valued at the estimated selling price less the cost of disposal and reasonable profit for the selling effort. The fair value write-up of acquired work-in-process and finished goods inventory was $8.9 million, the amount of which will be amortized over the expected turn of the acquired inventory. Accordingly, a $2.0 million and a $6.9 million incremental cost of sales charge associated with the fair value write-up of inventory acquired in the acquisition of SPG was recorded for the years ended December 31, 2019 and 2018, respectively.

The Company recognized the following finite-lived intangible assets as part of the acquisition of SPG:



(In thousands)	Amount		Weighted average life in years
Developed technology	$	20,070	8.0
Trademarks and trade names	6,670		12.0
Customer relationships	107,790		12.0
Other	15,900		0.9
	$	150,430	10.0

The acquired identifiable intangible assets are being amortized on a straight-line basis. The fair value of acquired identifiable intangible assets was determined using the “income approach”. In performing these valuations, the key underlying probability-adjusted assumptions of the discounted cash flows were projected revenues, gross margin expectations, discount rate and operating cost estimates. The valuations were based on the information that was available as of the acquisition date and the expectations and assumptions that have been deemed reasonable by the Company’s management. There are inherent uncertainties and management judgment required in these determinations. The fair value measurements of the assets acquired and liabilities assumed were based on valuations involving significant unobservable inputs, or Level 3 in the fair value hierarchy.

The purchase price of SPG exceeded the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed by $184.2 million. Cash flows used to determine the purchase price included strategic and synergistic benefits (investment value) specific to the Company, which resulted in a purchase price in excess of the fair value of identifiable net assets. The purchase price also included the fair values of other assets that were not identifiable, not separately recognizable under accounting rules (e.g., assembled workforce) or of immaterial value in addition to a going-concern element that represents the Company’s ability to earn a higher rate of return on the group of assets than would be expected on the

separate assets as determined during the valuation process. This additional investment value resulted in goodwill. No amount of goodwill is expected to be deductible for income tax purposes.

During the quarter ended June 29, 2019, the Company finalized its fair value determination of the assets acquired and liabilities assumed. The valuation of the assets acquired and liabilities assumed was based on the information that was available as of the acquisition date, and the expectations and assumptions that have been deemed reasonable by the Company’s management.

On January 22, 2018, the Company acquired Particle Sizing Systems, LLC (PSS), which provides particle sizing instrumentation for liquid applications to the semiconductor and life science industries. The acquired assets and assumed liabilities became part of the Company’s Advanced Materials Handling segment. The transaction was accounted for under the acquisition method of accounting and the results of operations of PSS are included in the Company’s consolidated financial statements since January 22, 2018. The acquisition does not constitute a material business combination.

The purchase price for PSS was cash consideration of $37.3 million, funded from the Company’s existing cash on hand. Costs associated with the acquisition of the product line were not significant and were expensed as incurred.

The purchase price of PSS exceeds the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed by $8.8 million. Cash flows used to determine the purchase price included strategic and synergistic benefits (investment value) specific to the Company, which resulted in a purchase price in excess of the fair value of identifiable net assets. This additional investment value resulted in goodwill, which is expected to be deductible for income tax purposes.

The following table summarizes the final allocation of the purchase price to the fair values assigned to the assets acquired and liabilities assumed at the date of acquisition and adjusted as of December 31, 2018.



(In thousands):	As of March 31, 2018			As of December 31, 2018
Trade accounts and notes receivable, net	$	3,616		$	3,898
Inventories, net	1,889			1,827
Other current assets	14			23
Property, plant and equipment, net	—			103
Identifiable intangible assets	20,000			25,600
Other noncurrent assets	21			3
Accounts payables	(438		)	(294		)
Other accrued liabilities	(2,799		)	(2,667		)
Net assets acquired	22,303			28,493
Goodwill	15,353			8,804
Total purchase price	$	37,656		$	37,297

As of December 31, 2018, the Company finalized its fair value determinations of the assets acquired and liabilities assumed. The valuation of the assets acquired and liabilities assumed was based on the information that was available as of the acquisition date, and the expectations and assumptions that have been deemed reasonable by the Company’s management.