Note 2 - Business Combinations

3 Months Ended

Aug. 31, 2013

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

2.     BUSINESS COMBINATIONS

Business combinations completed in fiscal 2013:

Acquisition of LIFECODES – The Company completed the acquisition of the LIFECODES business on March 22, 2013. This acquisition enables Immucor to enter the field of transplantation diagnostics – a close adjacency to our current business of transfusion medicine. The LIFECODES business specializes in pre-transplant human leukocyte antigen (“HLA”) typing and screening to ensure the most compatible match between patient and donor, as well as post-transplant patient monitoring to aid in the identification of graft rejection. LIFECODES also offers other immune-monitoring products.

The total cash purchase price of the LIFECODES business was $86.2 million, of which $87.3 was paid in fiscal 2013, and $1.1 million was returned by the seller in the first quarter of fiscal 2014 as a result of finalizing certain purchase price adjustments.  The purchase agreement included a contingent consideration arrangement for a potential earn-out totaling $10.0 million in cash based upon the LIFECODES business attaining certain operating targets for the 2013 calendar year. Management estimated that the fair value of the contingent consideration arrangement as of the acquisition date was approximately $4.4 million. This was determined by applying a form of the income approach, based on the probability-weighted projected payment amounts discounted to present value at a rate appropriate for the risk of achieving the milestones. The key assumptions were the earn-out period payment probabilities, and an appropriate discount rate. These assumptions are considered to be level 3 inputs by ASC Topic 820, Fair Value Measurement, which is not observable in the market.

During the first quarter of fiscal 2014, the fair value of the contingent consideration liability was decreased by $1.2 million to reflect a change in the earn-out payment probabilities, and the accretion of the fair value amount. The decrease in the contingent consideration liability is reflected as a gain of $1.3 million in acquisition-related item in the consolidated statement of operations. The accretion of the fair value amount was $0.1 million for the first quarter of fiscal 2014 and was included in interest expense in the consolidated statement of operations. The contingent consideration liability is included in accrued expenses and other current liabilities in the Company’s consolidated balance sheet as of August 31, 2013.

The Company included the operating results of LIFECODES in the consolidated statement of operations since the acquisition date on March 22, 2013. The results for the three months ended August 31, 2013 included net sales of $11.3 million and a loss before income taxes of $1.7 million from LIFECODES.

The financial information in the table below summarizes the results of operations of the Company on a pro forma basis as though the LIFECODES acquisition had occurred at June 1, 2012. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the LIFECODES acquisition had taken place at the beginning of the earliest period presented. Such pro forma financial information is based on the historical financial statements of the Company. This pro forma financial information is based on estimates and assumptions, which have been made solely for purposes of developing such pro forma information, including, without limitation, purchase accounting adjustments. The pro forma financial information presented below also includes depreciation and amortization based on the valuation of the Company’s tangible assets and identifiable intangible assets, and interest expense resulting from the LIFECODES acquisition. The unaudited pro forma financial information presented below for the three months ended August 31, 2012 does  not reflect any synergies or operating cost reductions that may be achieved. Also included in the table below are our actual results for the three months ended August 31, 2013 (in thousands):

	Three Months Ended
	August 31
	2013			2012
Net sales	$	96,044			96,252
Net loss	$	(7,760	)		(11,606	)