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Business Acquisitions | 9 Months Ended
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Jan. 28, 2023
Business Acquisitions |
Business Acquisitions | 18. Business Acquisitions ​ Planck Acquisition ​ On August 17, 2022 the Company closed its acquisition of Planck, a leading provider of advanced unmanned aircraft navigation solutions based in San Diego, California. Pursuant to the purchase agreement, the Company paid a total purchase price of $5,105,000 from cash-on-hand plus a $500,000 holdback for certain assets of Planck. Planck is a small technology company and post-acquisition will be incorporated into AeroVironment’s MUAS segment to focus on integrating its flight autonomy solutions, such as ACE™, or Autonomous Control Engine, into the Company’s offerings to enable safe, autonomous takeoff and landing from moving platforms on land or at sea in GPS-denied environments. Other solutions include AVEM™, a fully integrated mobile tethered sensor platform designed for persistent autonomous operation from moving vehicles and vessels in any environment, and a suite of machine-learning object detection and tracking systems that are customized for specific end-user needs. The Company accounted for the acquisition under the acquisition method of accounting for business combinations. ​ The following table summarizes the provisional allocation of the purchase price over the estimated fair value of the assets and liabilities assumed in the acquisition of Planck. The purchase price allocation is expected to be finalized as soon as practicable within the measurement period, but not later than one year following the acquisition date (in thousands): ​
​ | ​ | ​ | ​ | ​
​ | ​ | August 17, | ​
​ | ​ | 2022 | ​
Fair value of assets acquired: | ​ | ​ | ​ | ​
Technology |  | $ | 3,200 | ​
Backlog | ​ | ​ | 700 | ​
Inventories | ​ | ​ | 109 | ​
Other assets | ​ | ​ | 19 | ​
Property and equipment, net | ​ | ​ | 13 | ​
Goodwill | ​ | ​ | 1,633 | ​
Total identifiable net assets | ​ | $ | 5,674 | ​
​ | ​ | ​ | ​ | ​
Fair value of liabilities assumed: | ​ | ​ | ​ | ​
Customer advances | ​ | ​ | 69 | ​
Total liabilities assumed | ​ | ​ | 69 | ​
Total identifiable net assets | ​ | $ | 5,605 | ​
​ | ​ | ​ | ​ | ​
Fair value of consideration transferred: | ​ | ​ | ​ | ​
Cash | ​ | $ | 5,105 | ​
Holdback | ​ | ​ | 500 | ​
Total consideration | ​ | $ | 5,605 | ​
​ Determining the fair value of the intangible assets acquired requires significant judgment, including the amount and timing of expected future cash flows, long-term growth rates and discount rates. The fair value of the intangibles assets was determined using a discounted cash flow analysis, which were based on the Company’s preliminary estimates of future sales, earnings and cash flows after considering such factors as general market conditions, anticipated customer demand, changes in working capital, long term business plans and recent operating performance. Use of different estimates and judgments could yield materially different results. ​ The goodwill is attributable to the synergies the Company expects to achieve through leveraging the acquired technology to its existing customers, the workforce of Planck and expected future customers in the MUAS market. For tax purposes the acquisition was treated as an asset acquisition and the goodwill is deductible. ​ Planck Supplemental Pro Forma Information (unaudited) ​ The following unaudited pro forma summary presents condensed consolidated information of the Company as if the business acquisition had occurred on May 1, 2021 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | Three Months Ended | ​ | Nine Months Ended | ​ | Nine Months Ended
​ | ​ | January 28, | ​ | January 29, | ​ | January 28, | ​ | January 29,
​ | ​ | 2023 | ​ | 2022 | ​ | 2023 | ​ | 2022
Revenue | ​ | $ | 134,395 | ​ | $ | 90,752 | ​ | $ | 357,411 | ​ | $ | 315,086
Net (loss) income attributable to AeroVironment, Inc. | ​ | $ | (390) | ​ | $ | (140) | ​ | $ | (13,840) | ​ | $ | (12,752)
​ ​ Planck revenue since acquisition on August 17, 2022 was $76,000. The Company did not have any material, nonrecurring pro forma adjustments directly attributable to the business acquisition included in the reported pro forma revenue and earnings. ​ These pro forma amounts have been calculated by applying the Company’s accounting policies, assuming transaction costs had been incurred during the three months ended July 31, 2021, reflecting the additional amortization that would have been charged and including the results of Planck prior to acquisition. ​ The Company incurred approximately $286,000 and $855,000 of acquisition-related expenses for the three and nine months ended January 28, 2023. These expenses are included in selling, general and administrative on the Company’s unaudited condensed consolidated statement of operations. ​ The unaudited pro forma supplemental information is based on estimates and assumptions, which the Company believes are reasonable and are not necessarily indicative of the results that have been realized had the acquisition been consolidated in the tables above as of May 1, 2021, nor are they indicative of results of operations that may occur in the future. ​ Telerob Acquisition ​ On May 3, 2021, the Company closed its acquisition of Telerob pursuant to the terms of the Telerob Purchase Agreement. Telerob develops, manufactures, sells, and services remote-controlled unmanned ground robots and transport vehicles for civil and defense applications. ​ Pursuant to the Telerob Purchase Agreement at closing, the Company paid €37,455,000 (approximately $45,400,000) in cash to the Telerob Seller (subject to certain purchase price adjustments as set forth in the Telerob Purchase Agreement), less (a) €3,000,000 (approximately $3,636,000) to be held in escrow for breaches of the Telerob Seller’s fundamental warranties or any other of Telerob Seller’s warranties to the extent not covered by a representation and warranty insurance policy (the “RWI Policy”) obtained by the Company in support of certain indemnifications provided by the Telerob Seller; (b) transaction-related fees and costs incurred by the Telerob Seller, including change in control payments triggered by the transaction; and (c) 50% of the cost of obtaining the RWI Policy. In addition, at closing the Company paid off approximately €7,811,000 (approximately $9,468,000), of certain indebtedness of Telerob, which amount was paid in combination to the Telerob Seller and the lender under an agreement between Telerob GmbH and the lender providing for a reduced payoff amount. This indebtedness was offset by cash on hand at Telerob at closing. The escrow amount is to be released to the Telerob Seller, less any amounts paid or reserved, 30 months following the closing date. ​ In addition to the consideration paid at closing, the Telerob Seller may receive €2,000,000 (approximately $2,424,000) in additional cash consideration if specific revenue targets for Telerob are achieved during the 12 month period after closing beginning on the first day of the calendar month following the closing (the “First Earnout Year”) and an additional €2,000,000 (approximately $2,424,000) in cash consideration if specific revenue targets for Telerob are achieved in the 12 month period following the First Earnout Year. The Telerob Seller may also receive up to €2,000,000 (approximately $2,424,000) in additional cash consideration if specific awards and/or orders from the U.S. military are achieved prior to the end of a 36-month post-closing period. The first year earnout of €2,000,000 (approximately $2,424,000) was not achieved. ​ The Company accounted for the acquisition under the acquisition method of accounting for business combinations. During the fiscal year ended April 30, 2022, the Company finalized its determination of the fair value of the assets and liabilities assumed as of the acquisition date, which is summarized in the following table (in thousands): ​
​ | ​ | ​ | ​ | ​
​ | ​ | May 3, | ​
​ | ​ | 2021 | ​
Fair value of assets acquired: | ​ | ​ | ​ | ​
Accounts receivable |  | $ | 1,045 | ​
Unbilled receivable | ​ | ​ | 829 | ​
Inventories, net | ​ | ​ | 15,074 | ​
Prepaid and other current assets | ​ | ​ | 314 | ​
Property and equipment, net | ​ | ​ | 1,571 | ​
Operating lease assets | ​ | ​ | 1,508 | ​
Other assets | ​ | ​ | 494 | ​
Technology | ​ | ​ | 11,500 | ​
Backlog | ​ | ​ | 2,400 | ​
Customer relationships | ​ | ​ | 5,000 | ​
Other intangible assets | ​ | ​ | 102 | ​
Goodwill | ​ | ​ | 20,800 | ​
Total assets acquired | ​ | $ | 60,637 | ​
​ | ​ | ​ | ​ | ​
Fair value of liabilities assumed: | ​ | ​ | ​ | ​
Accounts payable | ​ | $ | 1,136 | ​
Wages and related accruals | ​ | ​ | 560 | ​
Customer advances | ​ | ​ | 1,243 | ​
Current operating lease liabilities | ​ | ​ | 361 | ​
Other current liabilities | ​ | ​ | 3,310 | ​
Non-current operating lease liabilities | ​ | ​ | 1,147 | ​
Other non-current liabilities | ​ | ​ | 224 | ​
Deferred income taxes | ​ | ​ | 5,617 | ​
Total liabilities assumed | ​ | ​ | 13,598 | ​
Total identifiable net assets | ​ | $ | 47,039 | ​
​ | ​ | ​ | ​ | ​
Fair value of consideration: | ​ | ​ | ​ | ​
Cash consideration, net of cash acquired | ​ | $ | 46,150 | ​
Contingent consideration | ​ | ​ | 889 | ​
Total | ​ | $ | 47,039 | ​
​ Determining the fair value of the intangible assets acquired requires significant judgment, including the amount and timing of expected future cash flows, long-term growth rates and discount rates. The fair value of the intangibles assets was determined using a discounted cash flow analysis, which were based on the Company’s best estimate of future sales, earnings and cash flows after considering such factors as general market conditions, anticipated customer demand, changes in working capital, long term business plans and recent operating performance. Use of different estimates and judgments could yield materially different results. ​ The goodwill is attributable to the synergies the Company expects to achieve through leveraging the acquired technology to its existing customers, the workforce of Telerob and expected future customers in the UGV market. For tax purposes the acquisition was treated as a stock purchase and the goodwill is not deductible. ​ Telerob Supplemental Pro Forma Information (unaudited) ​ The following unaudited pro forma summary presents condensed consolidated information of the Company as if the business acquisition had occurred on May 1, 2020 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | Nine Months Ended
​ | ​ | January 29, | ​ | January 29,
​ | ​ | 2022 | ​ | 2022
Revenue | ​ | $ | 90,093 | ​ | $ | 313,110
Net loss attributable to AeroVironment, Inc. | ​ | $ | 1,753 | ​ | $ | (6,091)
​ The Company did not have any material, nonrecurring pro forma adjustments directly attributable to the business acquisition included in the reported pro forma revenue and earnings. ​ These pro forma amounts have been calculated by applying the Company’s accounting policies, assuming transaction costs had been incurred during the three months ended August 1, 2020, reflecting the additional amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied from May 1, 2020 with the consequential tax effects and including the results of Telerob prior to acquisition. ​ The Company incurred approximately $113,000 and $661,000 of acquisition-related expenses for the three and nine months ended January 29, 2022. These expenses are included in selling, general and administrative on the Company’s unaudited condensed consolidated statement of operations. ​ The unaudited pro forma supplemental information is based on estimates and assumptions, which the Company believes are reasonable and are not necessarily indicative of the results that have been realized had the acquisition been consolidated in the tables above as of May 1, 2020, nor are they indicative of results of operations that may occur in the future.

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