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Other Investments | 9 Months Ended
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Mar. 31, 2019
Equity Method Investments And Joint Ventures [Abstract] |
Other Investments |
Note 6. | Other Investments
Equity Investment in Privately-Held Company In November 2017, the Company acquired a 93.8% equity investment in a privately-held company (“Equity Investment”) for $51.5 million. In addition, the Company paid $0.2 million for a working capital adjustment to that purchase price. The Company’s pro-rata share of earnings/(loss) from this investment for the three and nine months ended March 31, 2019 was $(0.2) million and $1.8 million, respectively. The Company’s pro rata share of earnings from this investment for the three and nine months ended March 31, 2018 was $0.8 million and $2.0 million, respectively, and was recorded in other expense (income), net in the Condensed Consolidated Statements of Earnings. This investment is accounted for under the equity method of accounting. The following table summarizes the Company's equity in this nonconsolidated investment:
|  | Interest |  | Ownership % as of |  |  | Equity as of |
Location |  | Type |  | March 31, 2019 |  |  | March 31, 2019 ($000) |
USA |  | Equity Investment |  | 93.8% |  |  | $ | 58,174 |
The Equity Investment has been determined to be a variable interest entity because the Company has an overall 93.8% economic position in the investee, comprising a significant portion of its capitalization, but has only a 25% voting interest. The Company’s right to receive rewards and obligation to absorb expected losses is disproportionate to its voting interest. The Company is not the primary beneficiary because it does not have the power to direct the activities of the equity investment that most significantly impact its economic performance. Certain business decisions, including decisions with respect to operating budgets, material capital expenditures, indebtedness, significant acquisitions or dispositions, and strategic decisions, require the approval of owners holding a majority percentage in the Equity Investment. Beginning on the date it was acquired, the Company accounted for its interest as an equity method investment, as the Company has the ability to exercise significant influence over operating and financial policies of the Equity Investment. As of March 31, 2019 and June 30, 2018, the Company’s maximum financial statement exposure related to this Equity Investment was approximately $58.2 million and $56.3 million, respectively, which is included in Investments on the Condensed Consolidated Balance Sheet as of March 31, 2019. The Company has the right to purchase all of the outstanding interest of each of the minority equity holders, and the minority equity holders have the right to cause the Company to purchase all of their outstanding interests, at any time on or after the third anniversary of the investment, or earlier upon certain events. The purchase price is equal to the greater of: (a) (i) the product of the aggregate trailing 12-month revenues of the equity investment preceding the date of purchase, multiplied by (ii) a factor of 2.9 multiplied by (iii) a factor of 0.723, multiplied by (iv) the percentage interest owned by each minority equity holder and (b) $966,666. The Company performed a Monte Carlo simulation to estimate the fair value of the net put option at the investment date and recorded a liability of $2.2 million in Other long-term liabilities in the Condensed Consolidated Balance Sheet in accordance with ASC 815-10, Derivatives and Hedging. The fair value of the net put option is adjusted as necessary on a quarterly basis, with any changes in the fair value recorded through earnings. The change in fair value of the net purchase option from the investment date to March 31, 2019 was not material. Guangdong Fuxin Electronic Technology Equity Investment The Company has an equity investment of 20.2% in Guangdong Fuxin Electronic Technology, based in Guangdong Province, China, which is accounted for under the equity method of accounting. The total carrying value of the investment recorded at March 31, 2019 and June 30, 2018 was $13.8 million and $12.9 million, respectively. During the three and nine months ended March 31, 2019, the Company’s pro-rata share of earnings from this investment was $0.2 million and $0.9 million, respectively. During the three and nine months ended March 31, 2018, the Company’s pro-rata share of earnings from this investment was $0.2 million and $0.5 million, respectively. Equity earnings were recorded in other expense (income), net in the Condensed Consolidated Statements of Earnings. Other Equity Investment During the quarter ended September 30, 2018, the Company acquired a 10% equity investment in a privately-held company for $4.5 million. The Company has determined that the equity interest does not give it the ability to exercise significant influence or joint control. Therefore, the Company will not account for this investment under the equity method of accounting. Under ASU 2016-01, Financial Instruments, the Company has elected the measurement alternative, as the investment does not have a readily determinable fair value. Under the alternative, the Company measures the investment at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investment of the Company for which there were none during the quarter ended March 31, 2019.

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- Definition The entire disclosure for the information summarizing investments in and advances to majority-owned subsidiaries, other controlled companies, and other affiliates. It reflects specified information about ownership, financial results from, and financial position in such entities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 + Details
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