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Acquisitions
 6 Months Ended
Jun. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions Acquisitions
The Company spent $104.1 million in cash, net of cash acquired, to acquire Kern Microtechnik ("Kern") in January 2025. Kern is a leading manufacturer of high-precision machining and optical inspection solutions supporting a wide range of applications within the medical, semiconductor, research, and space markets. Kern has annual sales of approximately 50 million Euros. Kern is part of EIG.
The following table represents the allocation of the purchase price for the net assets of the Kern acquisition based on the estimated fair values at acquisition (in millions):
Property, plant and equipment$10.1 
Goodwill55.0 
Other intangible assets59.6 
Deferred income taxes(18.9)
Net working capital and other(1)
7.2 
Total purchase price$113.0 
Less: Acquisition date fair value of contingent payment liability(8.9)
Total cash paid$104.1 
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(1)Includes $6.4 million in accounts receivable, whose fair value, contractual cash flows and expected cash flows are approximately equal.
The amount allocated to goodwill is reflective of the benefits the Company expects to realize from the acquisition. Kern's design and engineering capabilities complement the Company's existing ultra precision technologies business.
At June 30, 2025, the purchase price allocated to other intangible assets of $59.6 million consists of $9.6 million of indefinite-lived intangible trade names, which are not subject to amortization. The remaining $50.0 million of other intangible assets consists of $40.4 million of customer relationships, which are being amortized over a period of 17 years, and $9.6 million of purchased technology, which is being amortized over a period of 17 years. Amortization expense for each of the next five years for the 2025 acquisition is expected to approximate $3 million per year.
The Kern acquisition includes an $8.9 million estimated fair value contingent payment due upon Kern achieving certain cumulative revenue and EBITDA targets over the period January 1, 2025 to January 1, 2027. The contingent liability was based on a probabilistic approach using level 3 inputs. At June 30, 2025, there was no change to the estimated fair value of the contingent payment liability.
The Kern acquisition had an immaterial impact on reported net sales, net income, and diluted earnings per share for the three and six months ended June 30, 2025. Had the acquisition been made at the beginning of 2025 or 2024, pro forma net sales, net income, and diluted earnings per share for the three and six months ended June 30, 2025 and 2024, would not have been materially different than the amounts reported.
The Company finalized its measurements of tangible and intangible assets and liabilities for its October 2024 acquisition of Virtek Vision International, which had no material impact to the consolidated statement of income and balance sheet. The Company has not finalized its measurements of certain tangible and intangible assets and liabilities or the accounting for income taxes for its January 2025 acquisition of Kern.
Acquisition Subsequent to June 30, 2025
In July 2025, the Company acquired all outstanding shares of FARO Technologies ("FARO") common stock for approximately $920.0 million, net of cash acquired. The transaction was completed following the approval of FARO's stockholders and receipt of all regulatory approvals. FARO has annual sales of approximately $340 million. FARO is a leading provider of 3D measurement and imaging solutions, including portable measurement arms, laser scanners and trackers, software solutions, and comprehensive service offerings. FARO will join the Electronic Instruments Group segment.