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Business Acquisitions | 12 Months Ended
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Dec. 31, 2021
Business Combination and Asset Acquisition [Abstract] |
Business Acquisitions | Business Acquisitions Antuit On October 7, 2021, the Company acquired Antuit Holdings Pte. Ltd. (“Antuit”), a provider of demand-sensing and pricing optimization software solutions for retail and consumer products companies. Through this acquisition, the Company intends to enhance its solution offerings to customers in these industries by combining Antuit’s platform with its existing software solutions and EVM products. The acquisition was accounted for under the acquisition method of accounting for business combinations. The Company’s cash purchase consideration was $145 million in cash paid, net of Antuit’s cash on-hand. The Company utilized estimated fair values as of the acquisition date to allocate the total purchase consideration to the identifiable assets acquired and liabilities assumed. The fair value of the net assets acquired was based on several estimates and assumptions, as well as customary valuation techniques, primarily the excess earnings method for technology and patent intangible assets. While we believe these estimates provide a reasonable basis to record the net assets acquired, the purchase price allocation is considered preliminary and subject to adjustment during the measurement period, which is up to one year from the acquisition date. The primary fair value estimates still considered preliminary as of December 31, 2021 include intangible assets and income tax-related items. The preliminary purchase price allocation to assets acquired and liabilities assumed was as follows (in millions):
Identifiable intangible assets | $ | 47 |
Accounts receivable | 9 |
Other assets acquired | 4 |
Deferred tax liabilities | (11) |
Other liabilities assumed | (9) |
Net assets acquired | $ | 40 |
Goodwill on acquisition | 105 |
Total purchase price | $ | 145 |
The $105 million of goodwill, which is non-deductible for tax purposes, has been allocated to the EVM segment and principally relates to the planned expansion of Antuit’s portfolio and integration with the Company’s existing solution offerings as well as expansion into current and new markets, industries and product offerings. The preliminary purchase price allocation to identifiable intangible assets acquired was as follows:
| Fair Value (in millions) |  | Useful Life (in years)
Technology and patents | $ | 39 |  |  | 8
Customer and other relationships | 7 |  |  | 2
Trade names | 1 |  |  | 2
Total identifiable intangible assets | $ | 47 |  |  |
In connection with the acquisition of Antuit, the Company also granted share-based compensation awards in the form of stock and cash-settled restricted stock units with an approximate fair value of $5 million. The total fair value of the awards is attributable to post-acquisition service and will generally be expensed over a three-year service period. The Company has not included unaudited pro forma results, as if Antuit had been acquired as of January 1, 2020, as doing so would not yield materially different results. Fetch On August 9, 2021, the Company acquired Fetch Robotics, Inc. (“Fetch”), a provider of autonomous mobile robot solutions for customers who operate in the manufacturing, distribution, and fulfillment industries, enabling customers to optimize workflows through robotic automation. Through this acquisition, the Company intends to expand its automation solution offerings within these industries. The acquisition was accounted for under the acquisition method of accounting for business combinations. The total purchase consideration was $301 million, which consisted of $290 million in cash paid, net of Fetch’s cash on-hand, and the fair value of the Company’s existing ownership interest in Fetch of $11 million, as remeasured upon acquisition. This remeasurement resulted in a $1 million gain reflected in Other (expense) income, net on the Consolidated Statements of Operations. The Company utilized estimated fair values as of the acquisition date to allocate the total purchase consideration to the identifiable assets acquired and liabilities assumed. The fair value of the net assets acquired was based on several estimates and assumptions, as well as customary valuation techniques, primarily the excess earnings method for technology and patent intangible assets. While we believe these estimates provide a reasonable basis to record the net assets acquired, the purchase price allocation is considered preliminary and subject to adjustment during the measurement period, which is up to one year from the acquisition date. The primary fair value estimates still considered preliminary as of December 31, 2021 include intangible assets and income tax-related items. The preliminary purchase price allocation to assets acquired and liabilities assumed was as follows (in millions):
Identifiable intangible assets | $ | 114 |
Right-of-use lease asset | 11 |
Inventories | 6 |
Deferred tax assets | 6 |
Other assets acquired | 5 |
Lease liability | (11) |
Other liabilities assumed | (4) |
Net assets acquired | $ | 127 |
Goodwill on acquisition | 174 |
Total purchase price | $ | 301 |
The $174 million of goodwill, which is non-deductible for tax purposes, has been allocated to the EVM segment and principally relates to the planned geographic expansion and integration of Fetch into the Company’s manufacturing and warehouse automation offerings. During the fourth quarter of 2021, the Company recorded measurement period adjustments relating to facts and circumstances existing as of the acquisition date, which are included in the preliminary purchase price allocation above. The primary measurement period adjustment was related to the realizability of income tax net operating losses, resulting in a $33 million increase in net deferred tax assets and a corresponding decrease in goodwill. The preliminary purchase price allocation to identifiable intangible assets acquired was as follows:
| Fair Value (in millions) |  | Useful Life (in years)
Technology and patents | $ | 100 |  |  | 7
Customer and other relationships | 5 |  |  | 2
Trade names | 9 |  |  | 5
Total identifiable intangible assets | $ | 114 |  |  |
In connection with the acquisition of Fetch, the Company granted share-based compensation awards, principally as a replacement for unvested Fetch stock options, in the form of stock-settled restricted stock units. The total fair value of approximately $23 million is attributable to post-acquisition service and will generally be expensed over a three-year service period. The Company has not included unaudited pro forma results, as if Fetch had been acquired as of January 1, 2020, as doing so would not yield materially different results. Adaptive Vision On May 17, 2021, the Company acquired Adaptive Vision Sp. z o.o. (“Adaptive Vision”), a provider of graphical machine vision software with applications in the manufacturing industry, as well as a provider of libraries and other offerings for machine vision developers. The acquisition was accounted for under the acquisition method of accounting for business combinations. The Company’s cash purchase consideration of $18 million, net of cash on-hand, was primarily allocated to technology-related intangible assets of $13 million and associated deferred tax liabilities, and goodwill of $7 million. The technology-related intangible assets have an estimated useful life of eight years. The goodwill, which will be non-deductible for tax purposes, has been allocated to the EVM segment and principally relates to the planned expansion of the Adaptive Vision technologies into new product offerings and markets. The Company has not included unaudited pro forma results, as if Adaptive Vision had been acquired as of January 1, 2020, as doing so would not yield materially different results. Reflexis On September 1, 2020, the Company acquired Reflexis Systems, Inc. (“Reflexis”), a provider of task and workforce management, execution, and communication solutions for customers in the retail, food service, hospitality, and banking industries. Through its acquisition of Reflexis, the Company enhanced its solution offerings to customers in these industries by combining Reflexis’ platform with its existing software solutions and its EVM product offerings. The Reflexis acquisition was accounted for under the acquisition method of accounting for business combinations. The Company’s final cash purchase consideration was $547 million, net of Reflexis’ cash on-hand and including resolution of contractual matters that resulted in escrow proceeds of $1 million being received by the Company in 2021. The acquisition of Reflexis was funded, in part, by the issuance of a new term loan (the “2020 Term Loan”) in the amount of $200 million. The acquisition of Reflexis was otherwise funded using the Company’s cash on hand and borrowing under the Company’s existing Revolving Credit Facility. See additional details related to the Company’s debt arrangements in Note 12, Long-Term Debt. In connection with its acquisition of Reflexis, and in exchange for the cancellation of unvested Reflexis stock options, the Company granted replacement share-based compensation awards to certain Reflexis employees in the form of Zebra incentive stock options. The total fair value of approximately $9 million is primarily attributable to post-acquisition service and expensed over the remaining service period. See Note 15, Share-Based Compensation for additional details related to these options. The Company utilized estimated fair values as of the acquisition date to allocate the total purchase consideration to the identifiable assets acquired and liabilities assumed. The fair value of the net assets acquired was based on several estimates and assumptions, as well as customary valuation techniques, primarily the excess earnings method for technology and patent intangible assets, as well as exit cost methodologies for liabilities such as deferred revenues. The purchase price allocation to assets acquired and liabilities assumed was as follows (in millions):
Identifiable intangible assets | $ | 213 |
Accounts receivable | 20 |
Property, plant and equipment | 10 |
Other assets acquired | 17 |
Deferred revenue | (16) |
Deferred tax liabilities | (39) |
Other liabilities assumed | (14) |
Net assets acquired | $ | 191 |
Goodwill on acquisition | 356 |
Total purchase consideration | $ | 547 |
The $356 million of goodwill, which is non-deductible for tax purposes, has been allocated to the EVM segment and principally relates to the planned integration of Reflexis’ solution offerings with the Company’s existing solution offerings as well as expansion in current and new markets, industries and product offerings. In 2021, the Company finalized the purchase price allocation and recorded measurement period adjustments consisting of a $9 million increase to the trade name intangible asset and a $2 million increase to deferred tax liabilities resulting in a $7 million reduction of goodwill. The purchase price allocation to identifiable intangible assets acquired was:
|  | Fair Value (in millions) |  | Useful Life (in years)
Technology and patents |  | $ | 160 |  |  | 8
Customer and other relationships |  | 43 |  |  | 2
Trade names |  | 10 |  |  | 8
Total identifiable intangible assets |  | $ | 213 |  |  |
Cortexica On November 5, 2019, the Company acquired Cortexica Vision Systems Limited (“Cortexica”), a provider of computer vision-based artificial intelligence solutions primarily for the retail industry. The purchase consideration of $7 million was primarily allocated to technology-related intangible assets of $4 million and goodwill of $4 million based on the fair values of identifiable assets acquired and liabilities assumed. The goodwill, which will be non-deductible for tax purposes, has been allocated to the EVM segment and principally relates to the Company’s expansion of the Cortexica technologies into new markets, industries, and product offerings. Profitect On May 31, 2019, the Company acquired Profitect, Inc. (“Profitect”), a provider of prescriptive analytics primarily for the retail industry. In acquiring Profitect, the Company enhanced its existing software solutions within the retail industry, with possible future applications in other industries, markets and product offerings. The Profitect acquisition was accounted for under the acquisition method of accounting for business combinations. The total purchase consideration was $79 million, which consisted of $75 million in cash paid, net of cash on-hand, and the fair value of the Company’s existing ownership interest in Profitect of $4 million, as remeasured upon acquisition. This remeasurement resulted in a $4 million gain reflected within Other (expense) income, net on the Consolidated Statements of Operations in 2019. The purchase consideration was allocated to the assets acquired and liabilities assumed based on their fair values as of the acquisition date. The fair value of intangible assets was derived utilizing a number of estimates and assumptions as well as customary valuation procedures and techniques, principally the excess earnings methodology for technology and patent intangible assets. The purchase price allocation to assets acquired and liabilities assumed was as follows (in millions):
Identifiable intangible assets | $ | 35 |
Other assets acquired | 4 |
Deferred tax liabilities | (4) |
Other liabilities assumed | (10) |
Net Assets Acquired | $ | 25 |
Goodwill on acquisition | 54 |
Total purchase consideration | $ | 79 |
The $54 million of goodwill, which is non-deductible for tax purposes, has been allocated to the EVM segment and principally relates to the Company’s expansion of the Profitect software offerings and technologies into current and new markets, industries and product offerings. The purchase price allocation to identifiable intangible assets acquired was:
| Fair Value (in millions) |  | Useful Life (in years)
Technology and patents | $ | 33 |  |  | 8
Customer and other relationships | 2 |  |  | 1
Total identifiable intangible assets | $ | 35 |  |  |
Temptime On February 21, 2019, the Company acquired Temptime Corporation (“Temptime”), a developer and manufacturer of temperature-monitoring labels and devices. The Temptime acquisition was accounted for under the acquisition method of accounting for business combinations. The Company paid $180 million in cash, net of cash on-hand, to acquire Temptime. The purchase consideration was allocated to the assets acquired and liabilities assumed based on their fair values as of the acquisition date. The fair value of intangible assets was derived utilizing a number of estimates and assumptions as well as customary valuation procedures and techniques, including the excess earnings and relief from royalties methodologies. The purchase price allocation to assets acquired and liabilities assumed was as follows (in millions):
Inventory | $ | 14 |
Property, plant and equipment | 10 |
Identifiable intangible assets | 106 |
Other assets acquired | 11 |
Deferred tax liabilities | (23) |
Other liabilities assumed | (12) |
Net Assets Acquired | $ | 106 |
Goodwill on acquisition | 74 |
Total purchase consideration | $ | 180 |
The $74 million of goodwill, which is non-deductible for tax purposes, has been allocated to the AIT segment and principally relates to the Company’s expansion of its product offerings and technologies into current and new markets and industries. The purchase price allocation to identifiable intangible assets acquired was:
| Fair Value (in millions) |  | Useful Life (in years)
Customer and other relationships | $ | 79 |  |  | 8
Technology and patents | 25 |  |  | 8
Trade names | 2 |  |  | 3
Total identifiable intangible assets | $ | 106 |  |  |
The operating results of each acquired company have been included in the Company’s Consolidated Balance Sheets and Statements of Operations beginning on their respective acquisition dates. Acquisition and integration costs The Company incurred approximately $25 million of acquisition-related costs in 2021, primarily related to third-party transaction and advisory fees associated with our business acquisitions, as well as transaction bonuses paid to existing Antuit option holders. These costs are included within Acquisition and integration costs on the Consolidated Statements of Operations. The Company incurred approximately $23 million of acquisition-related costs during 2020, which primarily consisted of payments to settle certain existing Reflexis share-based compensation awards whose vesting was accelerated at the discretion of Reflexis contemporaneously with the acquisition. Those payments, as well as $9 million of other acquisition-related costs primarily related to third-party transaction and advisory fees associated with our business acquisitions, are included within Acquisition and integration costs on the Consolidated Statements of Operations. The Company incurred approximately $22 million of acquisition-related costs during 2019, which primarily consisted of payments to settle certain existing Profitect share-based compensation awards whose vesting was accelerated at the discretion of Profitect contemporaneously with the acquisition. Those payments, as well as $9 million of other acquisition-related costs primarily related to third-party transaction and advisory fees associated with our business acquisitions, are included within Acquisition and integration costs on the Consolidated Statements of Operations.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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