Acquisition

3 Months Ended

Mar. 31, 2016

Business Combinations [Abstract]

Acquisition

Note 2—Acquisition

On November 12, 2015, the Company acquired all of the outstanding common stock of Secure Communication Systems, Inc. and its subsidiaries (collectively referred to as Secure Technology or Secure) (the Secure Acquisition)for a purchase price of $230 million subject to a working capital adjustment. Secure Technology is a leading provider of customized high-performance electronics, sub-systems, and component solutions for mission critical applications. The transaction was financed with borrowings under the Company’s new term loan facility.

The preliminary allocation of the Secure Acquisition’s net purchase price resulted in $153.5 million of goodwill. The Secure acquisition deepened Benchmark’s engineering capabilities and enhanced its ability to serve customers in the highly regulated industrial markets, including aerospace and defense. The goodwill recognized in connection with the acquisition represents the future economic benefit arising from assets acquired that could not be individually identified and separately recognized and is attributable to the general reputation, acquisition synergies and expected future cash flows of the acquisition as well as the nature of Secure’s products and services and its competitive position in the marketplace. The final allocation of the purchase price, which the Company expects to complete as soon as practicable, but no later than one year from the acquisition date, may differ from the amounts included in these financial statements. Management does not expect additional adjustments, if any, resulting from changes to the purchase price allocation, to have a material effect on the Company’s financial position or results of operations.

The following reconciliation of the purchase price for Secure reflects the preliminary purchase price allocation (in thousands):

Purchase price paid		$	230,504
Cash acquired			(922)
	Purchase price, net of cash received	$	229,582
Acquisition-related costs for 2016		$	85
Recognized amounts of identifiable assets acquired and liabilities assumed:
	Cash	$	922
	Accounts receivable		12,839
	Inventories		16,020
	Other current assets		1,569
	Property, plant and equipment		2,048
	Other assets		97
	Trade names and trademarks intangible		7,800
	Technology licenses intangible		15,500
	Customer relationships intangible		67,100
	Goodwill		153,499
	Current liabilities		(16,893)
	Long-term debt		(24)
	Other long-term liabilities		(800)
	Deferred income taxes		(29,173)
	Total identifiable net assets	$	230,504

The following summary pro forma condensed consolidated financial information reflects the Secure Acquisition as if it had occurred on January 1, 2015 for purposes of the statements of income. This summary pro forma information is not necessarily representative of what the Company’s results of operations would have been had this acquisition in fact occurred on January 1, and is not intended to project the Company’s results of operations for any future period.

Pro forma condensed consolidated financial information for the three months ended March 31,2015(unaudited) (in thousands):

Net sales	$	647,070
Net income	$	14,436