Discontinued Operations

3 Months Ended

Dec. 31, 2021

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

3. Discontinued Operations

Planned Disposition of Semiconductor Automation Business

On September 20, 2021, the Company entered into a definitive agreement to sell its semiconductor automation business to THL.

On February 1, 2022, subsequent to the close of our first fiscal quarter of 2022, the Company completed the sale of the semiconductor automation business for $3.0 billion in cash, subject to working capital and other customary adjustments. The Company expects net cash proceeds from the sale to be approximately $2.4 billion, after adjustments, taxes and other items. The semiconductor automation business is comprised of the Semiconductor Solution Group segment. Following the completion of the sale, the Company no longer serves the semiconductor market.

In connection with the closing of the sale, the Company and THL entered into a transition services agreement, to which both the Company and THL will provide each other with certain transition services related to finance and accounting, information technology, human resources, compliance, facilities, legal and research and development support, for time periods ranging from three to 24 months. In addition, the Company entered into two separate lease agreements for leases back to the Company for portions of the facilities that have served as its corporate headquarters in

Chelmsford, Massachusetts, and were sold to THL as part of the sale agreement. Each lease provides for a term of 24 months, which may be terminated earlier by the Company upon 90 days’ notice to THL.

During the fourth quarter of fiscal 2021, the Company determined that the semiconductor automation business met the criteria to be classified as a discontinued operation and, as a result, its historical financial results are reflected in the Company’s financial statements as a discontinued operation, and assets and liabilities were classified as assets and liabilities held for sale.

The following table presents the financial results of discontinued operations with respect to the semiconductor automation business (in thousands):

	Three Months Ended December 31,
	2021		2020
Revenue
Products	$	188,240	$	118,154
Services		15,430		13,207
Total revenue		203,670		131,361
Cost of revenue
Products		107,597		68,777
Services		8,309		6,791
Total cost of revenue		115,906		75,568
Gross profit		87,764		55,793
Operating expenses
Research and development		13,740		10,994
Selling, general and administrative		22,676		14,099
Restructuring charges		-		127
Total operating expenses		36,416		25,220
Operating income		51,348		30,573
Other income (loss), net		(46)		(1,239)
Income before income taxes		51,302		29,334
Income tax provision		10,840		6,012
Net income from discontinued operations	$	40,462	$	23,322

On July 1, 2019, the Company sold its semiconductor cryogenics business. During the first quarter of fiscal year ended 2021, the Company recorded a $1.3 million negative working capital adjustment to the gain on divestiture that was previously recorded in the fourth fiscal quarter of 2019. This adjustment is shown within Other income (loss), net within the income statement for the semiconductor automation business.

The following table presents the significant non-cash items and capital expenditures for the discontinued operations with respect to the semiconductor automation business that are included in the Consolidated Statements of Cash Flows (in thousands):

	December 31,
		2021		2020
Depreciation and amortization	$	-	$	2,019
Capital expenditures	$	2,283	$	1,827
Stock-based compensation		4,923		1,875

The carrying value of the assets and liabilities of the discontinued operations with respect to the semiconductor automation business on the Consolidated Balance Sheets as of December 31, 2021 and September 30, 2021 was as follows (in thousands):

		December 31, 2021		September 30, 2021
Assets
Cash and cash equivalents	$	45,000	$	45,000
Accounts receivable, net		133,578		142,256
Inventories		132,010		110,735
Other current assets		13,945		13,394
Total current assets of discontinued operation	$	324,533	$	311,385
Property, plant and equipment, net	$	34,457	$	32,058
Long-term deferred tax assets		2,518		3,167
Goodwill		81,514		81,477
Intangibles, net		44,576		44,468
Other assets		23,097		22,658
Total long-term assets of discontinued operation	$	186,162	$	183,828
Liabilities
Accounts payable	$	65,285	$	68,074
Deferred revenue		8,160		7,141
Accrued warranty and retrofit costs		5,912		6,081
Accrued compensation and benefits		20,963		18,144
Accrued Income Taxes		6,184		11,702
Accrued expenses and other current liabilities		14,454		18,014
Total current liabilities of discontinued operation	$	120,958	$	129,156
Long-term tax reserves		2,373		2,356
Long-term deferred tax liabilities		6,716		6,548
Long-term pension liabilities		5,547		5,490
Long-term operating lease liabilities		15,837		15,425
Other long-term liabilities		1,503		2,625
Total long-term liabilities of discontinued operation	$	31,976	$	32,444

Acquisition within the Semiconductor Automation Business

On April 29, 2021, the Company acquired Precise Automation Inc., a leading developer of collaborative robots and automation subsystems headquartered in Fremont, California. The total cash purchase price for the acquisition was approximately $69.8 million. Precise provides the semiconductor automation business with a product offering and technology portfolio to take advantage of the opportunities in the collaborative robot market.

The allocation of the consideration included $38.7 million of technology, $2.5 million of customer relationships, $33.1 million of goodwill, $6.2 million of deferred tax liabilities, and several other assets and liabilities. The purchase price allocation was based on a preliminary valuation which is subject to further adjustments within the measurement period when additional information becomes available.

The Company applied variations of the income approach to estimate the fair values of the intangible assets acquired. The completed technology was valued using excess earnings method and the customer relationships was valued using distributor margin method, both of which have a useful life of 11 years. The intangible assets acquired are amortized over the total weighted average period of 11 years using methods that approximate the pattern in which the economic benefits are expected to be realized.

The Company has included the financial results of the acquired operations within income from discontinued operations on its Consolidated Statements of Operations. The goodwill and intangible assets are not tax deductible.

The Company did not present a pro forma information summary for its consolidated results of operations because such results were immaterial.