Acquisitions

12 Months Ended

Jul. 02, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisitions

Note 5. Acquisitions

RPC Photonics, Inc. Acquisition

On October 30, 2018, the Company acquired all of the equity interest of RPC Photonics, Inc. (RPC). The consideration paid for RPC was approximately $33.4 million in cash and an additional earn-out of up to $53.0 million in cash to be paid based on the achievement of certain gross profit targets over approximately a four year period. The acquisition of RPC expands the Company’s 3D Sensing offerings.

Other Acquisitions:

On May 13, 2022 and May 20, 2022, the Company completed business acquisitions for total consideration of approximately $9.5 million in cash paid at close and an earn-out liability of up to $3.3 million cash to be paid based on the occurrence or achievement of certain agreed upon targets. In connection with these acquisitions, the Company recorded $7.3 million of developed technology and other intangibles, $10.0 million of goodwill, and $1.6 million of deferred tax liability resulting from the acquisitions. The acquired developed technology and other intangible assets are being amortized over their estimated useful lives ranging from one to six years.

On September 17, 2021, the Company acquired all of the equity of one business for approximately $1.6 million cash consideration, of which $1.2 million was paid with cash on hand and $0.4 million remains in current liabilities. The acquisition was accounted for as an asset purchase under the authoritative guidance. The developed technology will be amortized over its estimated useful life of five years.

On March 13, 2020, the Company completed a business acquisition for total consideration of approximately $5.2 million in cash paid at close and an earn-out liability of up to $5.5 million cash to be paid based on the occurrence or achievement of certain agreed upon targets. In connection with this acquisition, the Company recorded $6.2 million of developed technology and customer relationships, $4.3 million of goodwill, and $1.4 million of deferred tax liability resulting from the acquisitions. The acquired developed technology and customer relationship assets are being amortized over their estimated useful lives of six years.

Goodwill consists of expected future economic benefits that will result from expected future product sales, operating efficiencies and other synergies and is not expected to be deductible for tax purposes.

The following table provides a reconciliation of changes in fair value of the Company’s earn-out liabilities for the years ended July 2, 2022 and July 3, 2021, as follows (in millions):

	Total
Balance: June 27, 2020	$	9.9
Change in Fair Value measurement	(4.7)
Payments of Contingent Consideration	(1.2)
Balance July 3, 2021(1)	$	4.0
Additions to Contingent Consideration	2.5
Change in Fair Value measurement	0.3
Currency translation adjustment	0.1
Payments of Contingent Consideration	(4.4)
Balance July 2, 2022(2)	$	2.5

(1) Amount is included in other current liabilities in the Consolidated Balance Sheets.

(2) Includes $1.8 million in other current liabilities and $0.7 million in other non-current liabilities in the Consolidated Balance Sheets.