Business Acquisitions Business Acquisitions (Notes)

9 Months Ended

Sep. 30, 2013

Business Combinations [Abstract]

Business Acquisitions

Business Acquisitions

In December 2012, the Company acquired Lorex Technology Inc. ("Lorex"), a provider of consumer oriented and professional grade video surveillance systems, for approximately $61.2 million in cash. At December 31, 2012, the Company initially reported the net tangible assets of $19.1 million in the respective balance sheet accounts and the excess purchase price of $42.1 million in other assets.

The Company has since performed a purchase price allocation which resulted in an allocation of $15.1 million of identifiable intangible assets and $31.1 million of goodwill in conjunction with the Lorex acquisition, which has been recorded in the Company’s Thermal Vision and Measurement segment. This goodwill consists largely of the ability of Lorex to provide the Company domain knowledge and distribution channels in adjacent security markets. These purchase price adjustments have been applied retrospectively to the December 31, 2012 balance sheet.

The allocation of the purchase price is as follows (in thousands):

Cash acquired	$	1,170
Accounts receivable, net	10,183
Inventories	13,967
Property and equipment	1,049
Other assets	3,004
Liabilities	(10,252		)
Net tangible assets	19,121
Net deferred taxes	(4,189		)
Identifiable intangible assets	15,100
Goodwill	31,138
Purchase price	$	61,170

None of the goodwill recognized is deductible for income tax purposes.

The identifiable intangible assets and the estimated useful life of each are as follows (in thousands):

	Estimated Useful Life	Amount
Lorex Trade Name	indefinite	$	6,800
Customer Relationships	7 years	8,300
		$	15,100

Also in December 2012, the Company acquired Traficon International NV ("Traficon"), a provider of video image processing software and hardware for traffic analysis applications, for approximately $46.3 million in cash. At December 31, 2012, the Company initially reported the net tangible assets of $5.1 million in the respective balance sheet accounts and the excess purchase price of $41.2 million in other assets.

In April 2013, the Company made an additional payment of $2.1 million in cash as an adjustment to the purchase price. The Company has performed a purchase price allocation which resulted in an allocation of $20.1 million of identifiable intangible assets and $28.4 million of goodwill in conjunction with the Traficon acquisition, which has been recorded in the Company’s Thermal Vision and Measurement segment. This goodwill consists largely of the ability of Traficon to expand the Company's presence in the global traffic monitoring market through the provision of domain expertise and distribution channels. These purchase price adjustments have been applied retrospectively to the December 31, 2012 balance sheet.

Note 18. Business Acquisitions - (Continued)

The allocation of the purchase price is as follows (in thousands):

Cash acquired	$	181
Accounts receivable, net	6,435
Inventories	2,853
Property and equipment	179
Other assets	657
Liabilities	(5,248		)
Net tangible assets	5,057
Net deferred taxes	(5,166		)
Identifiable intangible assets	20,102
Goodwill	28,370
Purchase price	$	48,363

None of the goodwill recognized is deductible for income tax purposes.

The identifiable intangible assets and the estimated useful life of each are as follows (in thousands):

	Estimated Useful Life	Amount
Patented/Proprietary Technology	10 years	$	5,951
Backlog	1.5 years	1,852
Customer Relationships	12 years	12,299
		$	20,102

In April 2013, the Company acquired Marine and Remote Sensing Solutions, Ltd. ("MARSS"), a developer of software and sensor control systems for use in maritime security applications, including above and below water port security and ship-based man overboard detection, for approximately $3.2 million in cash.

In August 2013, the Company acquired certain tangible assets and intellectual property related to the design and manufacturing of wafer-level optics from DigitalOptics Corporation East for approximately $14.9 million in cash. The tangible assets, including property, equipment and inventory, and intellectual property that were acquired are included in the Consolidated Balance Sheet as of September 30, 2013 and are included in the Thermal Vision and Measurement segment assets in Note 17, "Operating Segments and Related Information," of the Notes to the Consolidated Financial Statements. The Company has preliminarily recorded $5.0 million in property and equipment and $9.9 million in other assets as of September 30, 2013. The allocation of the purchase price is subject to the final determination on the valuation of the assets acquired. The valuation is expected to be finalized by December 31, 2013.

The operating results for these acquisitions are included in the Company's 2013 results of operations.

These acquisitions are not significant, either individually or in the aggregate, as defined in Regulation S-X of the Securities and Exchange Commission, compared to the Company’s overall financial position.