Goodwill and Intangible Assets

9 Months Ended

Jun. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

6. Goodwill and Intangible Assets

Goodwill represents the excess of net book value over the estimated fair value of net tangible and identifiable intangible assets of a reporting unit. Goodwill is tested for impairment annually or more often if impairment indicators are present at the reporting unit level. If events occur or circumstances change that would more likely than not reduce fair values of the reporting units below their carrying values, goodwill will be evaluated for impairment between annual tests. No triggering events indicating goodwill impairment occurred during the nine months ended June 30, 2019.

The Company performs its annual goodwill impairment assessment on April 1st of each fiscal year. In accordance with ASC 350, Intangibles-Goodwill and Other, the Company initially assesses qualitative factors to determine whether the existence of events or circumstances indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the Company determines, based on this assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying value, it performs a quantitative goodwill impairment test by comparing the reporting unit’s fair value with its carrying value. An impairment loss is recognized for the amount by which the reporting unit’s carrying value exceeds its fair value, up to the total amount of goodwill allocated to the reporting unit. No impairment loss is recognized if the fair value of the reporting exceeds its carrying value.

As of June 30, 2019, the Company completed the annual goodwill impairment test for its five reporting units, including Automation Solutions, Contamination Control Solutions and Global Semiconductor Services within the Brooks Semiconductor Solutions Group segment, as well as Sample Management and GENEWIZ within the Brooks Life Sciences segment. Based on the test results, the Company determined that no adjustment to goodwill was necessary. The Company conducted a qualitative assessment for three reporting units within the Brooks Semiconductor Solutions Group segment and determined that it was more likely than not that their fair values were more than their carrying values. As a result of the analysis, the Company did not perform the quantitative assessment for these reporting units, and did not perform a quantitative analysis and, therefore, did not recognize any impairment losses. The Company performed the quantitative goodwill impairment test for the two reporting units within the Brooks Life Sciences segment. The Company determined that no adjustment to goodwill was necessary for these two reporting units. The

Sample Management reporting unit’s fair value significantly exceeded book value. The GENEWIZ reporting unit, which was recently acquired, had a fair value slightly above its book value.

The changes in the Company’s goodwill by operating segment since September 30, 2018 are as follows (in thousands):

	Brooks
	Semiconductor
	Solutions		Brooks
	Group		Life Sciences		Other		Total
Gross goodwill, at September 30, 2018	$	636,907	$	207,913	$	26,014	$	870,834
Accumulated goodwill impairments		(588,944)		—		(26,014)		(614,958)
Goodwill, net of accumulated impairments, at September 30, 2018		47,963		207,913		—		255,876
Acquisitions and adjustments		—		234,669		—		234,669
Gross goodwill, at June 30, 2019		636,907		442,582		26,014		1,105,503
Accumulated goodwill impairments		(588,944)		—		(26,014)		(614,958)
Goodwill, net of accumulated impairments, at June 30, 2019	$	47,963	$	442,582	$	—	$	490,545

During the nine months ended June 30, 2019, the Company recorded a goodwill increase of $234.7 million primarily related to the acquisition of GENEWIZ, partially offset by the impact of foreign currency translation adjustments. Please refer to Note 5 "Acquisitions" for further information on this transaction.

The components of the Company’s identifiable intangible assets as of June 30, 2019 and September 30, 2018 are as follows (in thousands):

	June 30, 2019						September 30, 2018
			Accumulated		Net Book				Accumulated		Net Book
	Cost		Amortization		Value		Cost		Amortization		Value
Patents	$	5,302	$	4,553	$	749	$	5,302	$	4,325	$	977
Completed technology		88,921		36,222		52,699		44,829		28,934		15,895
Trademarks and trade names		25,490		5,035		20,455		6,298		2,953		3,345
Customer relationships		267,225		79,002		188,223		142,489		62,750		79,739
Other intangibles		239		170		69		—		—		—
	$	387,177	$	124,982	$	262,195	$	198,918	$	98,962	$	99,956

Amortization expense for intangible assets was $26.2 million and $17.7 million, respectively, during the nine months ended June 30, 2019 and 2018.

Estimated future amortization expense for the intangible assets for the remainder of fiscal year 2019, the subsequent four fiscal years and thereafter is as follows (in thousands):

Fiscal year ended September 30,
2019	$	9,025
2020		41,365
2021		37,494
2022		34,390
2023		31,267
Thereafter		108,654
	$	262,195