On March 31, 2021, the Company acquired all of the outstanding common shares of Ham-Let for total purchase consideration of $362.9 million, which included $273.5 million of equity value plus $91.3 million of net debt offset by the settlement of an existing relationship of $1.9 million (vendor of UCT). In addition, the Company incurred approximately $10.5 million of costs related to the acquisition ($1.0 million incurred in fiscal year 2020 and $9.5 million was charged to operations for the six months ended June 25, 2021). Ham-Let engages in the development, manufacturing and marketing of a process valves, fittings and hoses for the control and monitoring of industrial systems in a variety of markets, including the Semiconductor market. These products are primarily used in ultra clean gas transportation systems for the transmission of liquids and gases. The Company’s primary reason for this acquisition was to broaden UCT’s relevance to the semiconductor equipment market and provide access to a new set of customers in the semiconductor fab infrastructure market. The Company borrowed an additional $355.0 million from its existing Credit Facility to finance the acquisition. See further discussion in Note 7 to the Notes to Condensed Consolidated Financial Statements.

In December 2020, the Company announced the acquisition of Ham-Let. The expected cash consideration for the equity valuation at that time was approximately 934.7 million Israeli New Shekel (“ILS”) or $287.1 million in equity value. In order to hedge against the foreign currency fluctuation of the USD against ILS at the settlement date, UCT received Board of Director approval to enter into forward hedge contracts to buy ILS. In January 2021, UCT completed the purchase of forward hedge contracts of 905.8 million ILS to lock in the $283.9 million cash that was delivered at the closing of the Ham-Let acquisition. US GAAP requires the recording of the purchase price of the acquired entity at the spot rate on acquisition date, rather than the cash amount hedged and paid. The variance between the cash paid of $283.9 million and the spot value at acquisition of $273.5 million was a loss of $10.4 million and was recorded in the accompanying Condensed Consolidated Statements of Operations as other income (expense), net for the three and six month periods ended June 25, 2021.

The Company has preliminarily allocated the purchase price of Ham-Let to the tangible assets, liabilities, identifiable intangible assets acquired and noncontrolling interest, based on their estimated fair values. The excess of purchase price over the aggregate fair value was recorded as goodwill. Goodwill associated with the acquisition is primarily attributable to the future technology, market presence and knowledgeable and experienced workforce. The fair value assigned to identifiable intangible assets acquired was determined using the income approach taking into account the Company’s consideration of a number of inputs, including an independent third-party analysis that was based upon estimates and assumptions provided by the Company. These estimates and assumptions were determined through established and generally accepted valuation techniques. The estimated fair value of the tangible and intangible assets acquired was allocated at Ham-Let’s acquisition date.

The allocation of the purchase price is preliminary pending the completion of various analyses and the finalization of estimates. The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the fair values of certain tangible assets and liabilities, primarily inventories, accounts receivable, property, plant and equipment, operating lease right-of-use assets and related operating lease liabilities, income and other taxes, intangible assets and residual goodwill. During the measurement period, which can be no more than one year from the date of acquisition, we expect to continue to obtain information to assist us in determining the final fair value of the net assets acquired at the acquisition date during the measurement period. Assets acquired, liabilities assumed and noncontrolling interest are recorded based on valuations derived from estimated fair value assessments and assumptions used by the Company. Thus, the provisional measurements of fair value discussed above are subject to change. The Company expects to finalize

the valuation as soon as practicable, but not later than one year from the acquisition date. While the Company believes that its estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired, liabilities assumed and noncontrolling interest, and the resulting amount of goodwill.

The following table summarizes the preliminary fair values of assets acquired, liabilities assumed and noncontrolling interest at the date of acquisition (in millions):

Cash and cash equivalents	$	20.1
Accounts receivable		51.6
Inventories		80.3
Prepaid expenses and other assets		17.3
Property, plant and equipment		52.1
Goodwill		86.1
Purchased intangible assets		124.4
Deferred tax assets		0.8
Operating lease right-of-use assets		27.7
Other non-current assets		2.2
Total assets acquired		462.6
Bank borrowings		(5.0	)
Accounts payable		(30.8	)
Accrued compensation and related benefits		(10.5	)
Other current liabilities		(12.4	)
Deferred tax liabilities		(12.0	)
Operating lease liabilities		(23.8	)
Other liabilities		(4.0	)
Total liabilities assumed		(98.5	)
Noncontrolling interests		(1.2	)
Total consideration transferred	$	362.9

			Purchased
	Useful Life		Intangible Assets
	(In years)		(In millions)
Customer relationships		10	$	73.9
IP Knowhow	10-15			35.5
Trade names		5		9.8
Backlog		1		5.2
Total purchased intangible assets			$	124.4

Goodwill is not amortized but is reviewed for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The results of operations for the Company for the three and six months ended June 25, 2021 include operating activities for Ham-Let since its acquisition date of March 31, 2021. For the three and six months ended June 25, 2021, net sales of approximately $58.2 million attributable to Ham-Let were included in the consolidated results of operations. For the three and six months ended June 25, 2021, results of operations included charges of $4.6 million attributable to amortization of purchased intangible assets. In addition, deal costs associated with the acquisition of $8.1 million and $9.5 million were included in the results of operations for the three and six months ended June 25, 2021, respectively. Deal costs are included in general and administrative expenses in the Company’s Condensed Consolidated Results of Operations.

The following unaudited pro forma consolidated results of operations assume the acquisition was completed as of the beginning of the year of the reporting periods presented.

The unaudited pro forma consolidated results of operations for the three and six months ended June 25, 2021 and June 26, 2020 (in millions, except per share amounts) as follows:

	Three Months Ended				Six Months Ended
	June 25,		June 26,		June 25,		June 26,
	2021		2020		2021		2020
(In millions, except per share amounts)
Revenues	$	515.2	$	391.8	$	989.1	$	760.9
Net income	$	23.1	$	13.1	$	54.1	$	4.0
Basic income per share	$	0.53	$	0.33	$	1.29	$	0.10
Diluted income per share	$	0.52	$	0.32	$	1.26	$	0.10

The unaudited pro forma results above include adjustments related to the purchase price allocation and financing of the acquisition, primarily to increase amortization for the identifiable intangible assets, to increase interest expense for the additional debt incurred to complete the acquisition, and to reflect the related income tax effect. The unaudited pro forma results for the three and six months ended June 26, 2020 include acquisition related costs of $14.9 million which are not expected to occur in future quarters. The unaudited pro forma condensed combined financial information has been prepared by management for illustrative purposes only and are not necessarily indicative of the condensed consolidated financial position or results of income in future periods or the results that would have been realized had UCT and Ham-Let been a combined company during the specified periods. The unaudited pro forma condensed combined financial information does not reflect any operating efficiencies and/or cost savings that the Company may achieve with respect to the combined companies, or any liabilities that may result from integration activities.

On April 15, 2019, the Company purchased substantially all of the assets of DMS, a semiconductor weldment and solutions provider based in Austin, Texas. Pursuant to the purchase agreement, the former owners of DMS were entitled to receive up to $12.5 million of potential cash earn-out if the combined weldment business, after the acquisition, achieved certain gross profit and gross margin targets for the twelve months ending June 26, 2020. During the second quarter of fiscal year 2020, DMS achieved the specified performance target of the earn-out, which resulted in the maximum payment of $12.5 million paid in August 2020. In the first quarter of fiscal year 2020, the Company completed the acquisition accounting and the valuation of the fair value of the assets acquired and the liabilities assumed.