ACQUISITIONS

6 Months Ended

Jun. 30, 2021

Business Combinations

In June 2021, we entered into exclusive negotiations to acquire 100% of the outstanding shares (the “Voluntis Acquisition”) of Voluntis. Voluntis, based in Boston, MA and Paris, France, is a pioneer in digital therapeutics. Under the terms of the contemplated transaction, Aptar would acquire from certain members of the management and certain shareholders the entirety of their shares representing approximately 64.6% of the share capital of Voluntis (on a non-diluted basis) at a price of €8.70 per share for approximately €50.8 million (approximately $61.5 million assuming a euro/USD exchange rate of 1.21). This values the full company equity (on a fully diluted basis) at approximately €78.8 million (approximately $95.3 million). Upon completion of this acquisition, Aptar will launch a mandatory cash simplified tender offer to acquire Voluntis's remaining shares for the same price of €8.70 per share (the "tender offer"). If the regulatory conditions are met upon completion of the tender offer, Aptar intends to implement a mandatory squeeze-out on the remaining outstanding shares of Voluntis on the same financial terms as those of the tender offer. The acquisition, which is subject to customary regulatory approvals and other closing conditions, the tender offer, which is subject to regulatory clearance from the French Markets Authority, and the squeeze-out are expected to be completed before the end of the fourth quarter of 2021. The purchase will be funded with available cash on hand. Subsequent to the end of the second quarter, on July 22, 2021, we signed a share purchase agreement for the Voluntis Acquisition with terms consistent with the description above.

On May 25, 2021, we entered into a strategic definitive agreement to acquire 80% of the equity interests (the "Hengyu Acquisition") in Weihai Hengyu Medical Products Co., Ltd. ("Hengyu"). Hengyu, a leading Chinese manufacturer of elastomeric and plastic components used in injectable drug delivery, is based in Weihai, China and has an enterprise value of $77 million. The closing of the transaction, expected during the third quarter of 2021, is subject to customary regulatory approvals and other closing conditions. Under the terms of the deal, we have the option to acquire the remaining 20% of Hengyu after a 5-year lock up period. The purchase will be funded with available cash on hand.

On April 1, 2020, we completed the Fusion Acquisition for a purchase price of approximately $163.8 million (net of $1.0 million of cash acquired), which was funded by a draw on our prior credit facility and cash on hand. Fusion, based in Dallas, TX, is a global leader in the design, engineering and distribution of luxury packaging for the beauty industry. As part of the Fusion Acquisition, we are also obligated to pay to the selling equity holders of Fusion certain contingent consideration based on 2022 cumulative financial performance metrics as defined in the purchase agreement. Based on a projection as of the acquisition date, we estimated the aggregate fair value for this contingent consideration arrangement to be $19.1 million utilizing a Black-Scholes valuation model. During the fourth quarter of 2020, a $3.6 million fair value true-up was recorded as an adjustment to the opening balance of goodwill and contingent liability. As of June 30, 2021, we have estimated the aggregate fair value for this contingent consideration arrangement to be $28.0 million.

As of the acquisition date, $5.7 million was held in restricted cash pending the finalization of a working capital adjustment and indemnity escrow. During the third quarter of 2020, $2.0 million related to the working capital escrow was released from restriction, resulting in a refund from seller of $294 thousand and a corresponding decrease to our purchase price and associated goodwill balance. During the second quarter of 2021, the remaining restricted cash was released. The results of Fusion's operations have been included in the Condensed Consolidated Financial Statements within our Beauty + Home segment since the date of acquisition.

The following table summarizes the assets acquired and liabilities assumed in the Fusion Acquisition as of the acquisition date at estimated fair value.



	2020
Assets
Cash and equivalents	$	1,010
Accounts receivable	4,380
Inventories	386
Prepaid and other	1,090
Property, plant and equipment	2,885
Goodwill	103,130
Intangible assets	79,900
Operating lease right-of-use assets	4,744
Other miscellaneous assets	65
Liabilities
Accounts payable, accrued and other liabilities	5,641
Deferred income taxes	—
Operating lease liabilities	4,207
Deferred and other non-current liabilities	322
Net assets acquired	$	187,420

The following table is a summary of the fair value estimates of the acquired identifiable intangible assets and weighted-average useful lives as of the acquisition date:



	2020
		Weighted-Average Useful Life (in Years)	Estimated Fair Value of Assets
Acquired technology		4	$	4,600
Customer relationships		13	62,300
Trademarks and trade names		4	10,300
License agreements and other		0.25	2,700
Total			$	79,900

Goodwill in the amount of $103.1 million was recorded related to the Fusion Acquisition which is included in the Beauty + Home segment. Goodwill is calculated as the excess of the consideration transferred over the net assets acquired and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill largely consists of unique relationships, brand equity and proprietary technology that has been established creating niches such as turnkey solutions for the beauty market related to the Fusion Acquisition as well as the abilities of acquired companies to maintain their competitive advantage from a technical viewpoint. Goodwill will not be amortized, but will be tested for impairment at least annually. For 2020 acquisitions, goodwill of $80.6 million is deductible for tax purposes.

Asset Acquisition

On October 16, 2020, we completed our acquisition of the assets of Cohero Health, Inc. ("Cohero Health") for $2.4 million. The net assets acquired and the results of Cohero Health's operations have been included in the Condensed Consolidated Financial Statements within our Pharma segment since the date of acquisition. Based in New York, Cohero Health develops innovative digital tools and technologies to improve respiratory care, reduce avoidable costs and optimize medication utilization.