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Acquisitions | 9 Months Ended
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Oct. 01, 2017
Business Combinations [Abstract] |
Acquisitions | Acquisitions ViDi Systems S.A. On April 4, 2017, the Company acquired all of the outstanding shares of ViDi Systems, S.A. (ViDi), a privately-held vision software company based in Switzerland. This transaction has been accounted for as a business combination. The total purchase price of $23,015,000 included cash payment of $20,019,000, with the remaining $2,996,000 recorded as a holdback to secure potential claims under the agreement. The holdback limitation period is 18 months, and therefore, this amount has been recorded in "Other non-current liabilities" on the Consolidated Balance Sheet. In addition, the Company entered into a special incentive payment tied to employment, which is not material, that the Company will record as compensation expense. Under this transaction, in addition to completed technologies, the Company acquired a team of software engineers that are expected to help the Company broaden the scope of applications that can be addressed with Cognex vision. ViDi's deep learning software uses artificial intelligence techniques to improve image analysis in applications where it is difficult to predict the full range of image variations that might be encountered. Using feedback, ViDi's software trains the system to distinguish between acceptable variations and defects. Assets acquired and liabilities assumed have been recorded at their estimated fair values as of the acquisition date. The purchase price was allocated as follows (in thousands):
Cash | $ | 146 |
Accounts receivable | 425 |
Prepaid expenses and other current assets | 129 |
Property, plant, and equipment | 40 |
Deferred income tax asset | 620 |
Accounts payable | (98 | )
Accrued expenses | (716 | )
Deferred income tax liability | (1,008 | )
Non-compete agreement | 370 |
Completed technologies | 4,774 |
Goodwill | 18,333 |
Purchase price | $ | 23,015 |
The non-compete agreement and completed technology are included in "Intangible assets" on the Consolidated Balance Sheet. The non-compete agreement will be amortized to research, development and engineering expenses over three years, and the completed technology will be amortized to cost of revenue over six years, both on a straight-line basis. The portion of the acquired goodwill deductible for tax purposes is $5,112,000. Transaction costs were immaterial and were expensed as incurred. GVi Ventures, Inc. On April 12, 2017, the Company acquired selected assets and assumed selected liabilities of GVi Ventures, Inc., a privately-held maker of pre-configured vision solutions for common automotive applications based in the United States. This transaction has been accounted for as a business combination. The total purchase price of $5,368,000 included cash payment of $4,069,000 and contingent consideration valued at $1,299,000 as of the acquisition date. In addition, the Company entered into special incentive payments tied to employment, none of which are material, that the Company will record as compensation expense. The undiscounted potential outcomes related to the contingent consideration range from $0 to $3,500,000 based upon certain milestone revenue levels over the next five years. As of October 1, 2017, the fair value of the contingent consideration was $1,477,000, with $311,000 recorded in “Accrued expenses,” and $1,166,000 recorded in "Other non-current liabilities" on the Consolidated Balance Sheet. The contingent consideration is remeasured each reporting period with changes in fair value recorded in "Other income (expense)" on the Consolidated Statements of Operations. Under this transaction, in addition to customer relationships and completed technologies, the Company acquired a team of software engineers that are expected to develop new products and increase the Company's ability to serve large customers in the automotive industry. Assets acquired and liabilities assumed have been recorded at their estimated fair values as of the acquisition date. The purchase price was allocated as follows (in thousands):
Accounts receivable | $ | 423 |
Inventories | 120 |
Prepaid expenses and other current assets | 1 |
Accounts payable | (152 | )
Accrued expenses | (10 | )
Completed technologies | 910 |
Customer relationships | 2,600 |
Goodwill | 1,476 |
Purchase price | $ | 5,368 |
The customer relationships and completed technologies are included in "Intangible assets" on the Consolidated Balance Sheet. The customer relationships are being amort ized to selling, general, and administrative e xpenses over eight years, and the completed technologies are being amortized to cost of revenue over five years, both on a straigh t-line basis. A portion of t he acquired goodwill is deductible for tax purposes. Transaction costs were immaterial and were expensed as incurred. Pro-forma information for these acquisitions has not been presented because they are not material, either individually or in the aggregate.

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