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Acquisitions | 12 Months Ended
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Dec. 31, 2017
Acquisitions | D. ACQUISITIONS Business Universal Robots On June 11, 2015, Teradyne acquired all of the outstanding equity of Universal Robots located in Odense, Denmark. Universal Robots is the leading supplier of collaborative robots which are low-cost, easy-to-deploy and simple-to-program robots that work side by side with production workers to improve quality, increase manufacturing efficiency and decrease manufacturing costs. Universal Robots is a separate operating and reportable segment, Industrial Automation. The total purchase price of $315.4 million consisted of $283.8 million of cash paid and $31.6 million of contingent consideration, measured at fair value. The contingent consideration was valued using a Monte Carlo simulation based on the following key inputs: (1) forecasted revenue; (2) forecasted EBITDA; (3) revenue volatility; (4) EBITDA volatility; and (5) discount rate. The contingent consideration is payable upon the achievement of certain thresholds and targets for earnings before income taxes, depreciation and amortization (“EBITDA”) for calendar year 2015, revenue for the period from July 1, 2015 to December 31, 2017 and revenue for the period from July 1, 2015 to December 31, 2018. The maximum amount of contingent consideration that could be paid is $65 million. Based on Universal Robots’ calendar 2015 EBITDA results, Teradyne paid $15 million or 100% of the eligible EBITDA contingent consideration amount in the first quarter of 2016. The contingent consideration related to revenue for the period from July 1, 2015 to December 31, 2017 in the amount of $24.5 million is expected to be paid in March 2018. The maximum payment for the remaining Universal Robots earn-out is $25.0 million. The Universal Robots acquisition was accounted for as a business combination and, accordingly, the results have been included in Teradyne’s consolidated results of operations from the date of acquisition. The allocation of the total purchase price to Universal Robots’ net tangible liabilities and identifiable intangible assets was based on their estimated fair values as of the acquisition date. The excess of the purchase price over the identifiable intangible assets and net tangible liabilities in the amount of $221.1 million was allocated to goodwill, which is not deductible for tax purposes. The following table represents the final allocation of the purchase price:
|  | Purchase Price Allocation |
|  | (in thousands) |
Goodwill |  | $ | 221,128 |
Intangible assets |  |  | 121,590 |
Tangible assets acquired and liabilities assumed: |  |  |  |
Current assets |  |  | 10,853 |
Non-current assets |  |  | 3,415 |
Accounts payable and current liabilities |  |  | (11,976 | )
Long-term deferred tax liabilities |  |  | (26,653 | )
Long-term other liabilities |  |  | (2,920 | )
Total purchase price |  | $ | 315,437 |
Teradyne estimated the fair value of intangible assets using the income and cost approaches. Acquired intangible assets are amortized on a straight-line basis over their estimated useful lives. Components of these intangible assets and their estimated useful lives at the acquisition date are as follows:
|  | Fair Value |  |  | Estimated Useful Life |
|  | (in thousands) |  |  | (in years) |
Developed technology |  | $ | 89,240 |  |  |  | 4.9 |
Trademarks and tradenames |  |  | 22,920 |  |  |  | 10.0 |
Customer relationships |  |  | 9,430 |  |  |  | 2.0 |
Total intangible assets |  | $ | 121,590 |  |  |  | 5.6 |
For the period from June 12, 2015 to December 31, 2015, Universal Robots contributed $41.9 million of revenues and had a $7.6 million loss before income taxes. The following unaudited pro forma information gives effect to the acquisition of Universal Robots as if the acquisition occurred on January 1, 2014. The unaudited pro forma results are not necessarily indicative of what actually would have occurred had the acquisition been in effect for the periods presented:
|  | For the Year Ended |
|  | December 31, 2015 |
|  | (in thousands, except per share amounts) |
Revenue |  | $ | 1,657,626 |
Net income |  | $ | 199,784 |
Net income per common share: |  |  |  |
Basic |  | $ | 0.94 |
Diluted |  | $ | 0.94 |
Pro forma results for the year ended December 31, 2015 were adjusted to exclude $1.6 million of non-recurring expense related to the fair value adjustment to acquisition-date inventory and $1.0 million of acquisition related costs incurred in 2015.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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