Business Acquisitions

12 Months Ended

Dec. 31, 2013

Business Acquisitions [Abstract]

Business Acquisition

Business Acquisitions

In December 2012, the Company acquired 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	(4,171		)
Identifiable intangible assets	15,100
Goodwill	31,121
Purchase price	$	61,171

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, 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 for the purchase of Traficon. The Company has performed a purchase price allocation which resulted in an allocation of $20.1 million of identifiable intangible assets and $30.1 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	(6,903		)
Identifiable intangible assets	20,102
Goodwill	30,107
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	10 years	12,299
		$	20,102

In April 2013, the Company acquired 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. The Company has recorded $0.4 million of identifiable intangible assets and $2.5 million of goodwill in the Company's Integrated Systems segment.

In August 2013, the Company acquired certain tangible assets and intellectual property related to the design and manufacturing of wafer-level optics of DOC Charlotte for approximately $14.9 million in cash. The Company has performed a purchase price allocation which resulted in an allocation of $2.5 million of identifiable intangible assets and $2.4 million of goodwill which has been recorded in the Company’s Thermal Vision and Measurement segment.

Note 18. Business Acquisitions - (Continued)

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

Inventories	$	741
Property and equipment	9,246
Net tangible assets	9,987
Identifiable intangible assets	2,520
Goodwill	2,401
Purchase price	$	14,908

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	12 years	$	2,000
Backlog	2 years	150
Customer Relationships	2.5 years	370
		$	2,520

The operating results of MARSS and DOC Charlotte are included in the Company’s results of operations since their respective dates of acquisition. The operating results of each of Lorex and Traficon are not included in the Company's 2012 results of operations, as such results were not significant.

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.