Business Combinations, Asset Acquisitions, and Joint Venture Formation

12 Months Ended

Dec. 31, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

12. Acquisition of Satelles

On April 1, 2024, the Company acquired Satelles, Inc., a provider of satellite-based time and location services that complement and protect GPS and other GNSS systems. This acquisition is intended to support the Company’s long-term business objectives.

The acquisition date fair value of the consideration paid to acquire the remaining 80.5% of the outstanding shares and voting interest of Satelles that was not previously owned by the Company was approximately $125.5 million. The Company accounted for the acquired business using the acquisition method of accounting by recording assets acquired and liabilities assumed at their respective fair values.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date:


	April 1, 2024
	Fair Value		Useful Life
	(In thousands)
Cash	$	14,738
Other current assets	1,901
Customer relationships	57,000		12 years
Other noncurrent assets	7,188
Goodwill	98,186
Total identifiable assets acquired	179,013
Liabilities assumed	(13,821)
Net identifiable assets acquired	$	165,192

The Company acquired customer relationship intangible assets with an acquisition date fair value of $57.0 million, which was determined using the multi-period excess earnings method. The Company included the following assumptions: the forecasted revenue growth, forecasted revenue attributable to customer contracts, forecasted capital expenditures, forecasted earnings before interest, taxes, depreciation, and amortization (EBITDA) margins, and the discount rate used to value the customer relationships. Changes in these assumptions used could have a significant impact on the acquisition-date fair value of this intangible asset. The customer relationships recognized were determined to have a useful life of 12 years. The Company will amortize the customer relationships over their useful lives, utilizing the economic benefit model. The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of Satelles. None of the goodwill is expected to be deductible for income tax purposes. During the period ended December 31, 2024, the Company updated its estimate related to deferred taxes, which resulted in a decrease in goodwill and an increase to deferred tax assets of $2.1 million. These updates are reflected in the table above.

The Company incurred $3.1 million of acquisition related costs that were expensed in the year ended December 31, 2024. These costs are included within selling, general, and administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss).

The amounts of revenue and earnings of Satelles included in the Company’s condensed consolidated statements of operations and comprehensive income (loss), excluding the impact of the Company’s remeasurement of its prior equity interest in Satelles, are as follows:


	Three Months Ended December 31, 2024		Period from Acquisition Date to December 31, 2024
	(In thousands)		(In thousands)
Revenue	$	4,710	$	12,637
Net loss	(5,230)		(12,758)

The following unaudited pro forma data summarizes the combined company’s results of operations for the periods indicated as if the acquisition of Satelles had been completed as of the beginning of the comparable prior annual reporting period. The unaudited pro forma data gives effect to actual operating results prior to the acquisition, adjusted to include the pro forma effect of amortization of intangibles and the elimination of intercompany sales and acquisition costs. These pro forma amounts are not intended to be indicative of the results that would have actually been obtained if the acquisition had occurred as of the beginning of the comparable prior annual reporting period or that may be obtained in the future.


	Three Months Ended December 31,				Twelve Months Ended December 31,
	2024		2023		2024		2023
	(In thousands)				(In thousands)
Revenue	$	212,990	$	197,231	$	832,553	$	801,199
Net income (loss)	37,617		32,680		96,314		(11,379)

Prior to the acquisition date, the Company accounted for its 19.5% interest in Satelles as an equity-method investment. The acquisition date fair value of the previous equity interest was $39.7 million and was included in the measurement of the consideration transferred. The Company recognized a gain of $19.8 million as a result of remeasuring its prior equity interest in Satelles held before the business combination. The gain is included within gain (loss) from equity method investments in the consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2024.