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Coherent Acquisition (Tables) | 9 Months Ended
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Mar. 31, 2023
Business Combination and Asset Acquisition [Abstract] |
Fair Value of Consideration | The preliminary total fair value of consideration paid in connection with the acquisition of Coherent, Inc. consisted of the following (in $000):
| Shares |  | Per Share |  | Total Consideration
Cash paid for merger consideration | — |  | — |  | $ | 5,460,808 |
Shares of COHR common stock issued to Legacy Coherent stockholders | 22,587,885 |  | $49.83 |  | 1,125,554 |
Converted Legacy Coherent RSUs attributable to pre-combination service | — |  | — |  | 82,037 |
Payment of Legacy Coherent debt | — |  | — |  | 364,544 |
Payment of Legacy Coherent transaction expenses | — |  | — |  | 62,840 |
|  |  |  |  | $ | 7,095,783 |
Schedule of Preliminary Purchase Price Allocation of Assets Acquired and Liabilities Assumed | Our preliminary allocation of the $7.1 billion purchase price of Legacy Coherent, based on the estimated fair value of the assets acquired and liabilities assumed as of the Closing Date, is as follows (in $000):
|  | Preliminary Allocation as of 7/1/2022 as adjusted through 3/31/23
|  | Previously Reported September 30, 2022 |  |  |  | Measurement Period Adjustments (i) |  | As Adjusted (preliminary)
Assets |  |  |  |  |  |  |  |
Current Assets |  |  |  |  |  |  |  |
Cash, cash equivalents, and restricted cash |  | $ | 393,324 |  |  |  |  | $ | — |  |  | $ | 393,324 |
Accounts receivable |  | 270,928 |  |  |  |  | — |  |  | 270,928 |
Inventories (ii) |  | 497,345 |  |  |  |  | 66,540 |  |  | 563,885 |
Prepaid and refundable income taxes (iii) |  | 8,869 |  |  |  |  | (1,592) |  |  | 7,277 |
Prepaid and other current assets |  | 41,467 |  |  |  |  | — |  |  | 41,467 |
Total Current Assets |  | 1,211,933 |  |  |  |  | 64,948 |  |  | 1,276,881 |
Property, plant & equipment, net (iv) |  | 424,228 |  |  |  |  | 16,704 |  |  | 440,932 |
Deferred income taxes (iii) |  | 1,115 |  |  |  |  | (793) |  |  | 322 |
Other assets |  | 102,726 |  |  |  |  | — |  |  | 102,726 |
Other intangible assets, net (v) |  | 2,425,454 |  |  |  |  | 1,079,546 |  |  | 3,505,000 |
Goodwill |  | 4,005,727 |  |  |  |  | (862,497) |  |  | 3,143,230 |
Total Assets |  | $ | 8,171,183 |  |  |  |  | $ | 297,908 |  |  | $ | 8,469,091 |
Liabilities |  |  |  |  |  |  |  |
Current Liabilities |  |  |  |  |  |  |  |
Current portion of long-term debt |  | $ | 4,504 |  |  |  |  | $ | — |  |  | $ | 4,504 |
Accounts payable |  | 116,754 |  |  |  |  | — |  |  | 116,754 |
Accrued compensation and benefits |  | 60,596 |  |  |  |  | — |  |  | 60,596 |
Operating lease current liabilities |  | 13,002 |  |  |  |  | — |  |  | 13,002 |
Accrued income taxes payable |  | 16,936 |  |  |  |  | — |  |  | 16,936 |
Other accrued liabilities (vi) |  | 136,042 |  |  |  |  | 702 |  |  | 136,744 |
Total Current Liabilities |  | 347,834 |  |  |  |  | 702 |  |  | 348,536 |
Long-term debt |  | 22,991 |  |  |  |  | — |  |  | 22,991 |
Deferred income taxes (iii) |  | 563,824 |  |  |  |  | 292,168 |  |  | 855,992 |
Operating lease liabilities |  | 43,313 |  |  |  |  | — |  |  | 43,313 |
Other liabilities (vi) |  | 97,438 |  |  |  |  | 5,038 |  |  | 102,476 |
Total Liabilities |  | $ | 1,075,400 |  |  |  |  | $ | 297,908 |  |  | $ | 1,373,308 |
Preliminary aggregate acquisition consideration |  | $ | 7,095,783 |  |  |  |  | $ | — |  |  | $ | 7,095,783 |
(i) The Company recorded measurement period adjustments to its preliminary acquisition date fair values due to the refinement of its valuation models, assumptions and inputs. The following measurement period adjustments were based upon information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the measurement of the amounts recognized at that date. (ii) The Condensed Combined Balance Sheet has been adjusted to record Legacy Coherent’s inventories at a preliminary fair value of approximately $564 million, an increase of $67 million from the preliminary fair value reported at September 30, 2022 with a corresponding decrease to goodwill. The Condensed Combined Statement of Earnings (Loss) for the three and nine months ended March 31, 2023 includes cost of goods sold of approximately zero and $158 million, respectively, related to the increased basis in the preliminary fair value compared to the carrying value. The costs are being amortized over the expected period during which the acquired inventory is sold, and thus are not anticipated to affect the Condensed Consolidated Statements of Earnings (Loss) beyond twelve months after the Closing Date. (iii) The Company has adjusted its prepaid and refundable income taxes, deferred tax asset and deferred tax liability positions as of March 31, 2023, to $7 million, zero and $856 million, respectively, as a result of measurement period adjustments. (iv) The Condensed Consolidated Balance Sheet has been adjusted to record Legacy Coherent’s property, plant and equipment (consisting of land, buildings and improvements, equipment, furniture and fixtures, and leasehold improvements) at a preliminary fair value of approximately $441 million, an increase of $17 million from the preliminary fair value reported at September 30, 2022 with a corresponding decrease to goodwill. The Condensed Consolidated Statements of Earnings (Loss) have been adjusted to recognize additional depreciation expense related to the increased basis. The additional depreciation expense is computed with the assumption that the various categories of assets will be depreciated over their remaining useful lives on a straight-line basis. (v) Preliminary identifiable intangible assets in the Condensed Combined Balance Sheet increased $1.1 billion from the preliminary fair value reported at September 30, 2022 with a corresponding decrease to goodwill. Intangibles amortization recorded in cost of goods sold for the three and nine months ended March 31, 2023 was $21 million and $64 million, respectively. Intangibles amortization recorded in selling, general and administrative expenses for the three and nine months ended March 31, 2023 was $51 million and $156 million, respectively. Preliminary identifiable intangible assets consist of the following and are being amortized over their estimated useful lives in the Condensed Consolidated Statements of Earnings (Loss) (in $000):
|  | Preliminary Fair Value | Estimated Useful Life
Trade names and trademarks |  | $ | 430,000 |  | N/A
Customer relationships |  | 1,830,000 |  | 15 years
Developed technology |  | 1,157,500 |  | 13.5 years
Backlog |  | 87,500 |  | 1.0 year
Intangible assets acquired |  | $ | 3,505,000 |  |
(vi) The Company recorded approximately $1 million of increases in other current liabilities and $5 million of increases in other liabilities as measurement period adjustments.
Unaudited Supplemental Pro Forma Financial Information | The unaudited supplemental pro forma financial information for the periods presented is as follows (in $000):
| Three Months Ended March 31, 2023 |  | Three Months Ended March 31, 2022
Revenue | $ | 1,240,194 |  |  | $ | 1,197,928 |
Net Earnings | 36,294 |  |  | 6,482 |
| Nine Months Ended March 31, 2023 |  | Nine Months Ended March 31, 2022
Revenue | $ | 3,955,049 |  |  | $ | 3,576,039 |
Net Earnings (Loss) | 247,715 |  |  | (234,815) |

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- Definition Tabular disclosure of a material business combination completed during the period, including background, timing, and recognized assets and liabilities. This table does not include leveraged buyouts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI https://asc.fasb.org/extlink&oid=79982066&loc=d3e1486-128463 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=79982066&loc=d3e1392-128463 + Details
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- Definition Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4845-128472 + Details
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