ACQUISITIONS

9 Months Ended

Sep. 30, 2021

Business Combination and Asset Acquisition [Abstract]

Business Combinations

On September 2, 2021, following the signature of a share purchase agreement on July 22, 2021 and the approval of the French Ministry of Economy under the foreign investment clearance regulations, we completed the acquisition of 64.3% of the share capital of Voluntis (the “Voluntis Acquisition”). Voluntis, based in Paris, France and Boston, MA, is a pioneer in digital therapeutics. We acquired from certain members of the management and certain shareholders the entirety of their shares representing approximately 64.3% 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 $60.4 million) funded with available cash on hand. This values the full company equity (on a fully diluted basis) at approximately €79.1 million (approximately $93.9 million). Aptar launched a mandatory cash simplified tender offer to acquire Voluntis's remaining shares for the same price of €8.70 per share (the "tender offer"). During September 2021, Aptar acquired €8.4 million (approximately $9.9 million) of additional shares from the tender offer, bringing the total investment as of September 30, 2021 to approximately €59.2 million (approximately $70.3 million) representing 74.9% of the total share capital, and implies a non-controlling interest valued at €19.9 million (approximately $23.6 million). 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 squeeze-out will be funded with available cash on hand. We are in the process of finalizing purchase accounting. Subsequent to quarter end, the tender offer was completed with available cash on hand and we acquired an additional 21.6% of the share capital for €17.1 million (approximately $19.8 million), resulting in Aptar owning 96.5% of the share capital of Voluntis. The squeeze-out is expected to be completed before the end of the fourth quarter of 2021.

On August 17, 2021, we completed the acquisition (the "Hengyu Acquisition") of 80% of the equity interests of 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. Under the terms of the agreement, 90% of the estimated purchase price for 80% ownership, RMB 347.7 million (approximately $53.6 million), was paid to the sellers in August 2021, with available cash on hand. A final purchase price adjustment of RMB 1.5 million (approximately $0.2 million) was recorded to Accounts payable, accrued and other liabilities and will be paid in the fourth quarter of 2021. The remaining 10% of the acquisition price for 80% ownership, RMB 38.7 million (approximately $6.0 million), is payable to the sellers eighteen months after closing plus simple interest of 4% and will be funded with available cash on hand. This values the full company equity (on a fully diluted basis) at RMB 484.9 million (approximately $74.8 million) and implies a non-controlling interest valued at RMB 97 million (approximately $15 million) as of the acquisition date. Pursuant to the agreement, we have the option to acquire the remaining 20% of the equity of Hengyu upon the fifth anniversary of the closing date. We are in the process of finalizing purchase accounting.

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 September 30, 2021, we have estimated the aggregate fair value for this contingent consideration arrangement to be $28.3 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 as of the acquisition dates at estimated fair value.



	2021		2020
Assets
Cash and equivalents	$	3,852	$	1,010
Accounts receivable	5,208		4,380
Inventories	606		386
Other Receivable	286		—
Prepaid and other	2,051		1,090
Property, plant and equipment	16,259		2,885
Goodwill	110,135		103,130
Intangible assets	63,808		79,900
Operating lease right-of-use assets	2,309		4,744
Other miscellaneous assets	100		65
Liabilities
Current maturities of long-term obligations, net of unamortized debt issuance costs	1,410		—
Accounts payable, accrued and other liabilities	9,663		5,641
Deferred income taxes	16,792		—
Operating lease liabilities	2,306		4,207
Deferred and other non-current liabilities	5,770		322
Net assets acquired	$	168,673	$	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 dates:



	2021			2020
	Weighted-Average Useful Life (in Years)	Estimated Fair Value of Assets		Weighted-Average Useful Life (in Years)	Estimated Fair Value of Assets
Acquired technology	10	$	32,145	4	$	4,600
Customer relationships	11.5	30,258		13	62,300
Trademarks and trade names	0	—		4	10,300
License agreements and other	0.25	1,405		0.25	2,700
Total		$	63,808		$	79,900

Goodwill in the amounts of $71.9 million and $38.2 million were recorded in the Pharma segment related to the Voluntis and Hengyu Acquisitions, respectively. 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 acquired in 2021 acquisitions, largely consists of developed technologies and customer relationships, while goodwill acquired in 2020 acquisitions 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 the 2021 and 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.