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Business Acquisitions | 9 Months Ended
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Oct. 01, 2022
Business Combination and Asset Acquisition [Abstract] |
Business Acquisitions | Business Acquisitions Matrox On June 3, 2022, the Company acquired Matrox Electronic Systems Ltd. (“Matrox”), a developer of advanced machine vision components and software. Through its acquisition of Matrox, the Company intends to expand its machine vision products and software offerings. The acquisition was accounted for under the acquisition method of accounting for business combinations. The Company’s total purchase consideration was $878 million comprised of $875 million in cash paid at closing, net of Matrox’s cash on-hand and an additional $3 million of cash that was paid in the third quarter of 2022. 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 customer relationships as well as the relief from royalty 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. During the third quarter of 2022, the Company recorded measurement period adjustments to increase customer relationship and technology intangible assets, as well as deferred tax liabilities by $36 million, $4 million and $11 million, respectively. These adjustments, relating to facts and circumstances existing as of the acquisition date, resulted in a $29 million reduction of goodwill. The primary fair value estimates still considered preliminary as of October 1, 2022 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 | $ | 297 |
Inventory | 33 |
Other assets acquired | 13 |
Deferred tax liabilities | (79) |
Other liabilities assumed | (21) |
Net assets acquired | $ | 243 |
Goodwill on acquisition | 635 |
Total purchase price | $ | 878 |
The $635 million of goodwill, which is non-deductible for tax purposes, has been allocated to the EVM segment and principally relates to the planned global expansion and integration of Matrox into the Company’s machine vision offerings. The preliminary purchase price allocation to identifiable intangible assets acquired was as follows:
| Fair Value (in millions) |  | Useful Life (in years)
Customer and other relationships | $ | 232 |  |  | 11
Technology and patents | 63 |  |  | 7
Trade names | 2 |  |  | 2
Total identifiable intangible assets | $ | 297 |  |  |
In connection with the acquisition of Matrox, the Company granted $13 million of cash-settled RSUs to certain employees in the second quarter, which are attributable to service to be rendered subsequent to the acquisition and will generally be expensed over a 3-year service period. The Company has not included unaudited pro forma results, as if Matrox had been acquired as of January 1, 2021, as doing so would not yield materially different results. Fetch During the third quarter of 2022, the Company finalized the purchase price allocation for its acquisition of Fetch Robotics, Inc. (“Fetch”). The measurement period adjustments recorded in the current year, all relating to facts and circumstances existing as of the acquisition date, were insignificant. Antuit.ai During the third quarter of 2022, the Company recorded measurement period adjustments relating to its acquisition of Antuit Holdings Pte. Ltd. (“Antuit”). The measurement period adjustments, all relating to facts and circumstances existing as of the acquisition date, consisted of a $7 million decrease to deferred tax liabilities, a $2 million increase to accounts payable, with an offsetting $5 million decrease to goodwill. The primary fair value estimates still considered preliminary as of October 1, 2022 relate to income tax items. Acquisition and integration costs The Company incurred approximately $19 million of acquisition-related costs during the nine months ended October 1, 2022, primarily related to third-party and advisory fees associated with the Matrox acquisition. For the three months ended October 1, 2022, acquisition-related costs were $1 million. These costs are included within Acquisition and integration costs on the Consolidated Statement 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 https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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