Acquisitions

Fiscal 2016 Acquisitions

During the second quarter of 2016, the Company purchased all of the outstanding stock of a privately-held provider of data storage software solutions targeted at OEM's and systems integrators. Goodwill arising from the acquisition is tax deductible and reflects the Company's expectation that the acquisition will enable the Company to broaden its relationships with certain of its existing key customers, realize synergies associated with leveraging the acquisition to develop other software solutions to become a provider of a full storage systems solution, and leverage the acquiree's knowledgeable and experienced workforce. Goodwill and identifiable assets are recorded in other non-current assets on the consolidated balance sheets. Identifiable intangible assets are being amortized over three to four years.

In addition, the Company acquired a manufacturing facility and related assets from a customer in the industrial end market during the second quarter of 2016. Consideration paid was less than the fair values of assets acquired, resulting in a bargain purchase gain of $1.6 million, net of tax, which was recorded in interest and other, net on the condensed consolidated statements of income in the second quarter of 2016. The Company reassessed, in the second quarter of 2016, the recognition and measurement of identifiable assets and liabilities acquired and concluded that all acquired assets and liabilities were recognized and that the valuation procedures and resulting estimates of fair values were appropriate. The bargain purchase gain resulted from the discount attributable to financing a portion of the purchase price with the acquiree using a non-interest bearing promissory note.

Total consideration paid for the above acquisitions was $90.3 million, consisting of $60.2 million of cash and non-interest bearing promissory notes with a discounted value of $30.1 million as of the respective acquisition dates.

The Company's allocation of the purchase price was based on management's estimate of the acquisition-date fair values of the tangible and identifiable intangible assets acquired and liabilities assumed, as follows:



	(In thousands)
Current assets, including cash of $1.3 million	$	33,198
Noncurrent assets, including identifiable intangible assets of $7.3 million and goodwill of $30.8 million	62,632
Current liabilities	(3,146		)
Noncurrent liabilities	(725		)
Total	91,959
Bargain purchase gain, net of tax	(1,642		)
Total consideration paid	$	90,317

There were no measurement-period adjustments for either of these two acquisitions during the one-year period subsequent to the date of acquisition.

Fiscal 2015 Acquisition

During the fourth quarter of 2015, the Company purchased all outstanding stock of a privately-held company that designs and manufactures equipment for the oil and gas industry. Consideration for the acquisition consisted of cash of $15.4 million plus up to an additional $23.5 million if certain annual earnings targets are achieved. The fair value of contingent consideration was determined to be $11.0 million as of the acquisition date.

During the second quarter of 2016, the fair value of the Company's contingent consideration liability decreased by $7.6 million, resulting in a credit to cost of sales on the condensed consolidated statement of income. The change in fair value resulted from a revision to the Company's estimate of future earnout payments, driven primarily by weakened conditions in the oil and gas industry.