Acquisition

12 Months Ended

Dec. 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 $219.8 million, as adjusted in accordance with the acquisition agreement. 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 term loan facility.

The allocation of the Secure Acquisition’s net purchase price resulted in $145.6 million of goodwill. The final allocation of the purchase price, which the Company completed in September 2016, reflects a $10.8 million purchase price adjustment received during the quarter ended September 30, 2016. The Secure Acquisition deepened Benchmark’s engineering capabilities and enhanced its ability to serve customers in 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 purchase price for Secure has been allocated as follows (in thousands):

			December 31,
			2015		Measurement		December 31,
			(as initially		period		2016
			reported)		adjustment		(as adjusted)
Purchase price paid		$	230,504	$	(10,750)	$	219,754
Cash acquired			(922)		—		(922)
	Purchase price, net of cash received	$	229,582	$	(10,750)	$	218,832
Acquisition-related costs for 2016						$	132
Recognized amounts of identifiable assets acquired and liabilities assumed:
	Cash	$	922	$	—	$	922
	Accounts receivable		12,839		(318)		12,521
	Inventories		16,020		(2,536)		13,484
	Other current assets		1,569		—		1,569
	Property, plant and equipment		2,048		—		2,048
	Other assets		97		—		97
	Trade names and trademarks intangible		7,800		—		7,800
	Technology licenses intangible		15,500		—		15,500
	Customer relationships intangible		67,100		—		67,100
	Current liabilities		(16,714)		(222)		(16,936)
	Long-term debt		(24)		—		(24)
	Other long-term liabilities		(800)		—		(800)
	Deferred income taxes		(29,173)		—		(29,173)
	Total identifiable net assets		77,184		(3,076)		74,108
	Goodwill		153,320		(7,674)		145,646
	Net assets acquired	$	230,504	$	(10,750)	$	219,754

The following summary pro forma condensed consolidated financial information reflects the Secure Acquisition as if it had occurred on January 1, 2014 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 these acquisitions in fact occurred on January 1, 2014, and is not intended to project the Company’s results of operations for any future period.

Pro forma condensed consolidated financial information for 2015 and 2014 (unaudited):

			Year Ended December 31,
(in thousands)			2015		2014
	Net sales	$	2,622,246	$	2,896,638
	Net income	$	95,595	$	80,025