Other Acquisitions and Investments

3 Months Ended

Sep. 30, 2020

Equity Method Investments and Joint Ventures [Abstract]

Other Acquisitions and Investments

Other Acquisitions and Investments

Acquisition of Ascatron AB

On August 20, 2020, the Company acquired all of the outstanding shares of Ascatron AB, located in Sweden. The acquisition will add essential elements to the Company's vertically integrated silicon carbide technology platform. Purchase price consideration totaled $36.7 million.

Due to the timing of the acquisition, the Company is in the process of measuring the fair value of assets acquired and liabilities assumed, including tangible and intangible assets and related deferred income taxes. The following table presents a

preliminary allocation of the purchase price of the assets acquired and liabilities assumed at the date of acquisition ($000):

Assets
Developed technology	$	20,000
Goodwill	18,922
Other assets	2,511
Total assets acquired	$	41,433
Liabilities
Non-interest bearing liabilities	$	(203)
Deferred tax liability	(4,526)
Total liabilities assumed	(4,729)
Net assets acquired	$	36,704

The goodwill is recorded in the Compound Semiconductor segment and is attributed to the workforce acquired as part of the transaction. The goodwill is non-deductible for income tax purposes. Transaction expenses related to the acquisition totaled $1.9 million for three months ended September 30, 2020 and is included in Selling, General and Administrative expenses in the Condensed Consolidated Statement of Earnings.

The amount of revenues and net earnings from the acquisition included in the Company’s Condensed Consolidated Statement of Earnings for the three months ended September 30, 2020 were insignificant.

Purchase of Equity Investment in INNOViON Corporation

As of September 30, 2020, the Company holds a 93.8% equity investment in INNOViON Corporation ("Innovion"), a leader in ion implantation technology for silicon and compound semiconductor devices, which was acquired in November 2017 for $51.5 million. The Company’s pro-rata share of earnings from this investment for the three months ended September 30, 2020 and 2019 was insignificant.

This investment is accounted for under the equity method of accounting. The following table summarizes the Company's equity in this nonconsolidated investment:

Location	Interest Type	Ownership % as of September 30, 2020	Equity as of September 30, 2020 ($000)
USA	Equity Investment	93.8%	$	59,539

Innovion was determined to be a variable interest entity because the Company had an overall 93.8% economic position in Innovion, comprising a significant portion of its capitalization, but had only a 25% voting interest. The Company’s right to receive rewards and obligation to absorb expected losses was disproportionate to its voting interest. The Company was not the primary beneficiary because it did not have the power to direct the activities of the equity investment that most significantly impacts its economic performance. Certain business decisions, including decisions with respect to operating budgets, material capital expenditures, indebtedness, significant acquisitions or dispositions, and strategic decisions, require the approval of owners holding a majority percentage in Innovion.  The Company previously accounted for its interest as an equity method investment as the Company had the ability to exercise significant influence over operating and financial policies of Innovion.

As of September 30, 2020 and June 30, 2020, the Company’s maximum financial statement exposure related to Innovion was approximately $59.5 million and $58.8 million, respectively, which is included in Investments on the Condensed Consolidated Balance Sheets.

On August 10, 2020, the Company entered into an agreement to acquire all the outstanding interests of Innovion. The Company acquired the remaining outstanding interests of Innovion on October 1, 2020.