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Acquisition of Web Monitoring Business
 12 Months Ended
Dec. 31, 2011
Acquisition of Web Monitoring Business [Abstract]  
Acquisition of Web Monitoring Business

NOTE 20:  Acquisition of Web Monitoring Business

On September 30, 2009, the Company acquired the web monitoring business of Monitoring Technology Corporation (MTC), a manufacturer of products for monitoring industrial equipment and processes. The acquired SmartAdvisor Web Monitoring System (WMS) is complementary to Cognex’s Smart View Web Inspection System (WIS), which is sold by the Company’s Surface Inspection Systems Division (SISD). When used together, the WIS automatically identifies and classifies defects and the WMS then provides the customer with the ability to determine the root causes of each of those defects so that they can be quickly eliminated. The combination of WMS and WIS allows SISD to provide a fully-integrated system to its surface inspection customers. The Company recorded goodwill of $1,692,000 related to this acquisition.

The Company paid $5,000,000 in cash, with $4,500,000 paid upon closing and $500,000 paid into an escrow account during the fourth quarter of 2009. There were no contingent payments. The purchase price was subject to a working capital adjustment of $59,000, which was paid to Cognex during the fourth quarter of 2009, thereby reducing the purchase price to $4,941,000. Transaction costs, which were expensed as incurred in the third quarter of 2009, totaled $40,000.

The purchase price was allocated as follows (in thousands):

 

 

                 
    

Estimated

Fair Value

    

Weighted-Average
Amortization Period

(in years)

  

Inventories

   $ 259          

Intangible assets

                

Completed technology

     670       7  

Customer relationships

     1,950       9  

Trademark

     140       8  

Non-compete agreements

     230       5  

Goodwill

     1,692          
   

 

 

          

Total assets acquired

     4,941          

Total liabilities assumed

     -          
   

 

 

          

Total purchase price

   $     4,941          
   

 

 

          

The acquired goodwill has been assigned to the SISD segment. The acquired intangible assets, including goodwill, are deductible for tax purposes.