Strategic Investments

3 Months Ended

Dec. 28, 2024

Equity Method Investments and Joint Ventures [Abstract]

Strategic Investments

Strategic Investments

Maverix Medical

On November 13, 2023, the Company entered into an agreement with KKR Comet, LLC, an affiliate of KKR & Co. Inc. (“KKR Comet”), to form a legal entity to develop and acquire innovative technologies and commercial operations within the lung cancer space. The new entity, named Maverix Medical LLC (“Maverix”), is managed by Ajax Health. As part of this strategic investment, the Company contributed $24.5 million in return for 45% ownership in the Class A Common units of Maverix, and both the Company and KKR Comet have committed to make additional capital contributions in proportion to the ownership percentages upon meeting certain objectives and as approved by the Maverix board. In accordance with ASC 810, Consolidation, and ASC 323, Investments - Equity Method and Joint Ventures, the Company determined that Maverix is a variable interest entity (“VIE”) however the Company is not the primary beneficiary but does have significant influence. Therefore, this investment has been accounted for under the equity method, which requires the Company to record its proportional share of the investee’s net income (loss). This investment is recorded within Other assets in the Consolidated Balance Sheets and the net investment as of December 28, 2024 was $19.5 million, and the Company’s proportionate share of Maverix’s net loss for the three months ended December 28, 2024 was $1.5 million.

During the first quarter of fiscal 2025, the Company received a capital call notice for 13.3% of total committed capital for a total amount of $9.0 million. This capital call was paid in January 2025.

Other

The Company holds other non-marketable equity securities as part of its strategic investments portfolio. Other non-marketable equity securities are measured at cost, less any impairment, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer. In addition, these investments are assessed for indicators of impairment, including adverse changes in technological milestones and financial conditions of the investee. Changes in fair value of these strategic investments are recorded in other income (expense), net in the Consolidated Statements of Income. No such impairments were recorded in the three months ended December 28, 2024 and December 30, 2023. At December 28, 2024 and September 28, 2024, the Company’s investments in equity securities without readily determinable fair values totaled $30.3 million and $25.3 million, respectively, and are included in Other assets on the Consolidated Balance Sheets.