Business Combinations

9 Months Ended

Sep. 30, 2016

Business Combinations [Abstract]

Business Combinations

BUSINESS COMBINATIONS

In August 2016, we acquired Laser Projection Technologies, Inc. (“LPT”) for a purchase price, net of cash acquired, of $17.1 million, paid with cash on hand, subject to certain additional post-closing adjustments. LPT, located in Londonderry, New Hampshire, specializes in laser projection and measurement systems used throughout manufacturing environments around the globe to maximize productivity and efficiency. The acquisition enhances our portfolio of 3D measurement solutions and supports our long-term strategy to expand our presence in key markets, which complement our existing product lines.

In July 2016, we acquired BuildIT Software & Solutions Ltd. (“BuildIT”) for a purchase price, net of cash acquired, of $3.8 million, paid with cash on hand, subject to certain additional post-closing adjustments. BuildIT, a software solutions business located in Montreal, Canada, specializes in process-configurable 3D metrology software solutions with hardware agnostic interfaces. The addition of BuildIT enhances our metrology portfolio, providing customers greater software options to use in a variety of applications to reduce inspection and assembly times and increase productivity.

The acquisitions of BuildIT and LPT constitute business combinations as defined by the FASB Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. Accordingly, the assets acquired and liabilities assumed were recorded at their fair values on the date of acquisition. The following preliminary purchase price allocations are based on the information that was available to make estimates of the fair value and may change as further information becomes available and additional analyses are completed. While we believe such information provided a reasonable basis for estimating the fair values, we may obtain more information and evidence during the measurement period that may result in changes to the estimated fair value amounts. The measurement period ends on the earlier of one year after the acquisition date or the date we received the information about the facts and circumstances that existed at the acquisition date. Subsequent adjustments, if necessary, will be recognized during the period in which the amounts are determined. These refinements include: (1) changes in the estimated fair value of certain intangible assets acquired; and (2) changes in deferred tax assets and liabilities related to the fair value estimates.

Following is a summary of our preliminary allocations of the purchase price to the fair values of the assets acquired and liabilities assumed as of the date of each acquisition:

	BuildIT			LPT
Accounts receivable	$	237		$	54
Inventory	—			322
Other assets	36			248
Deferred income tax assets	—			1,112
Intangible assets (1)	1,381			5,224
Goodwill (2)	3,042			11,922
Accounts payable and accrued liabilities	(95		)	(697		)
Other liabilities	(485		)	(1,086		)
Deferred income tax liability	(304		)	—
Total purchase price, net of cash acquired	$	3,812		$	17,099

(1) Intangible assets acquired with BuildIT and LPT will be amortized over their weighted-average lives of about 7 to 10 years.

(2) The goodwill arising from the acquisitions consists largely of the expected synergies from combining operations as well as the value of the workforce. The goodwill value is not expected to be tax deductible.

Acquisition and integration costs are not included as components of consideration transferred, but are recorded as expense in the period in which such costs are incurred. To date, we have incurred approximately $0.7 million in acquisition and integration costs for the BuildIT and LPT acquisitions.

Pro forma results of operations for BuildIT and LPT have not been presented because the effects of these acquisitions, individually and in aggregate, were not material to our consolidated results of operations.