Business Acquisitions

12 Months Ended

Dec. 31, 2011

Business Acquisitions [Abstract]

Business Acquisitions

2. Business Acquisitions

On April 2, 2010, the company acquired certain assets and liabilities of the spacecraft development and manufacturing business of General Dynamics Advanced Information Systems, a subsidiary of General Dynamics Corporation (the “Seller”), for $55 million in cash, subject to a potential working capital adjustment.  The company’s consolidated financial statements reflect the operations of the acquired business since the date of acquisition.  Revenues and operating income of the acquired business were $69.8 million and $7.3 million, respectively, for the period from April 2, 2010 to December 31, 2010.

The acquisition was accounted for under the acquisition method in accordance with Accounting Standards Codification (“ASC”) Topic 805, “Business Combinations.”  The allocation of the purchase price for the tangible and identifiable intangible assets acquired and liabilities assumed was based on their estimated fair values at the date of acquisition using established valuation techniques.  The company may recognize changes to the acquired assets or liabilities as a result of a working capital adjustment.  In 2011, the company recorded an additional $0.5 million of goodwill related to the update of purchase accounting associated with the acquisition.  The company and the Seller are each disputing the other party’s claim for a purchase price adjustment based on the calculation of working capital as of the closing date.

The table below reflects the purchase price allocation (in thousands):

Property plant and equipment	$	42,268
Intangible assets		7,100
Goodwill		19,710
Net working capital		(14,078	)
Total purchase price	$	55,000

The purchased intangible assets consist of acquired technology and are being amortized over a 10-year period.  The company recorded $19.7 million of goodwill, all of which is deductible for tax purposes.  The primary items that generated the goodwill include the value of the synergies between the company and the acquired business and the acquired assembled workforce, neither of which qualifies as an amortizable intangible asset.