Acquisitions

12 Months Ended

Jul. 31, 2021

Business Combination and Asset Acquisition [Abstract]

Business Combination Disclosure [Text Block]

Acquisitions

On May 21, 2021, the Company acquired all of the outstanding shares of Magicard Holdings Limited (“Magicard”), based in Weymouth, United Kingdom, for $56,694, net of cash received. Magicard is a manufacturer of identification card printers with high-resolution, full-color image capabilities, built-in security features and the ability to encode smart cards. The intangible assets consist of a customer relationship of $18,303, which is being amortized over eight years, technology of $2,837, which is being amortized over five years and a tradename of $567, which is being amortized over two years. The goodwill acquired of $43,235 is not tax-deductible. Magicard has a complementary product offering that allows the Company to offer new printing and encoding capabilities to both new and existing customers and is included in the Company’s IDS segment.

On April 15, 2021, the Company launched an all-cash tender offer in Finland to acquire all of the outstanding, publicly-held shares of Nordic ID Oyj, a Finnish corporation (“Nordic ID”) based in Salo, Finland. Nordic ID specializes in RFID readers, scanners, and the associated software to power track-and-trace applications in industrial manufacturing. On May 19, 2021, the results of the Company’s cash tender offer were finalized with 92.9% of all outstanding shares validly tendered as part of the tender offer. On May 21, 2021, the Company acquired the shares validly tendered as part of the tender offer for $9,804 plus the assumption of debt of $4,668. The intangible assets consist of a customer relationship of $3,803, which is being amortized over ten years and technology of $600, which is being amortized over six years. The goodwill acquired of $12,584 is not tax-deductible. Nordic ID has begun the squeeze-out process after which Brady intends to acquire all of the remaining outstanding shares and apply for delisting of Nordic ID from the Nasdaq First North Growth Market Finland. Nordic ID is included in the Company’s IDS segment.

On June 16, 2021, the Company acquired all of the outstanding shares of The Code Corporation (“Code”), based in Salt Lake City, Utah, for $172,815, net of cash received. Code specializes in high-quality barcode scanners and the associated software to power track-and-trace applications in a variety of industries. Initial financing for this acquisition consisted of $75,000 from the Company’s revolving loan agreement and the balance from cash on hand. Prior to July 31, 2021, the Company repaid $37,000 of the borrowing on the credit facility with cash on hand. The intangible assets consist of a customer relationship of $44,500, which is being amortized over nine years, technology of $6,200, which is being amortized over five years and a tradename of $600, which is being amortized over three years. The goodwill acquired of $139,347 is not tax-deductible. The final purchase price allocation is subject to post-closing adjustments pursuant to the terms of the merger agreement. Code has a complementary product offering that allows the Company to expand in the industrial track-and-trace market and is included in the Company’s IDS segment.

The following table summarizes the combined preliminary fair values of the assets acquired and liabilities assumed at the date of the acquisitions:

Cash and cash equivalents	$	7,513
Accounts receivable - net	15,401
Total inventories	6,581
Prepaid expenses and other current assets	544
Property, plant and equipment	2,023
Goodwill	195,166
Other intangible assets	77,410
Other assets	3,109
Accounts payable	(7,584)
Accrued compensation and benefits	(5,537)
Taxes, other than income taxes	(4,081)
Other current liabilities	(8,197)
Long-term debt	(4,668)
Deferred tax liabilities	(11,348)
Other liabilities	(14,836)
	$	251,496
Less: cash acquired	(7,513)
Fair value of total consideration	$	243,983

The results of the operations of the acquired businesses have been included since the date of acquisition in the accompanying consolidated financial statements. Acquisition-related expenses of $3,164 were recognized in SG&A during the year ended July 31, 2021. Pro forma information related to the acquisitions during the year ended July 31, 2020 is not included because the impact on the Company’s consolidated results of operations is considered to be immaterial.