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Acquisitions | 9 Months Ended
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Sep. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Acquisitions | 4. Acquisitions 2024 Acquisition Pending Acquisition of Tantti Laboratory Inc. On July 29, 2024, the Company announced that it entered into a definitive agreement to acquire privately-held Tantti Laboratory Inc. (“Tantti”). Tantti, which is headquartered in Taoyuan City, Taiwan, is expected to accelerate the Company’s expansion into new modality markets with unique, scalable purification solutions for large molecule biologics. The Company expects the acquisition of Tantti to be completed in the fourth quarter of 2024 subject to the satisfaction of customary closing conditions, including clearance through the Taiwanese regulatory channel. 2023 Acquisitions Metenova Holding AB On October 2, 2023, the Company's subsidiary, Repligen Sweden AB, acquired Metenova from the former shareholders of Metenova (the “Metenova Seller”) pursuant to a Share Sale and Purchase Agreement (the “Share Purchase Agreement”), dated as of September 23, 2023 (such acquisition, the “Metenova Acquisition”), by and among Repligen Sweden AB, the Metenova Seller, and the Company, in its capacity as guarantor of the obligations of Repligen Sweden AB under the Share Purchase Agreement. Metenova, which is headquartered in Molndal, Sweden, offers magnetic mixing and drive train technologies that are widely used by global biopharmaceutical companies and contract development and manufacturing organizations. The Metenova Acquisition further strengthens our fluid management portfolio with these products. Consideration Transferred The Company accounted for the Metenova Acquisition as a purchase of business under ASC 805, “Business Combinations,” and the Company engaged a third-party valuation firm to assist with the valuation of Metenova. Under the Share Purchase Agreement, all outstanding equity interests of Metenova were acquired for consideration with a value totaling $172.6 million. The Metenova Acquisition was funded through payment of $164.5 million in cash, the issuance of 52,299 unregistered shares of the Company's common stock totaling $8.1 million and contingent consideration with an immaterial fair value. Under the acquisition method of accounting, the assets acquired and liabilities assumed of Metenova were recorded as of the acquisition date, at their respective fair values, and consolidated with those of the Company. The fair value of the net liabilities acquired is $1.9 million, the fair value of the intangible assets acquired is $58.8 million and the residual goodwill is $115.7 million. Acquisition-related costs are not included as a component of consideration transferred but are expensed in the periods in which costs are incurred. The Company has incurred $6.5 million of transaction and integration costs associated with the Metenova Acquisition from the date of acquisition to September 30, 2024, wit h $0.4 million and $3.0 million o f transaction and integration costs incurred during the three and nine months ended September 30, 2024, respectively. The transaction costs are included in operating expenses in the condensed consolidated statements of comprehensive income (loss) for the period ended September 30, 2024. Fair Value of Net Assets Acquired The allocation of purchase price is based on the fair value of assets acquired and liabilities assumed based on the final valuation of Metenova. The Company has made appropriate adjustments to the purchase price allocation during the measurement period, which ended on October 2, 2024. The components and final allocation of the purchase price consist of the following (amounts in thousands):
Cash and cash equivalents |  | $ | 5,768 |
Accounts receivable |  |  | 3,730 |
Inventory |  |  | 4,477 |
Prepaid expenses and other current assets |  |  | 470 |
Property and equipment |  |  | 433 |
Operating lease right of use asset |  |  | 615 |
Customer relationships |  |  | 12,659 |
Developed technology |  |  | 44,377 |
Trademark and tradename |  |  | 939 |
Non-competition agreements |  |  | 787 |
Goodwill |  |  | 115,722 |
Accounts payable |  |  | (1,432 | )
Accrued liabilities |  |  | (2,934 | )
Operating lease liability |  |  | (275 | )
Noncurrent deferred tax liability |  |  | (12,481 | )
Noncurrent operating lease liability |  |  | (255 | )
Fair value of net assets acquired |  | $ | 172,600 |
Acquired Goodwill The goodwill of $115.7 million represents future economic benefits expected to arise from anticipated synergies from the integration of Metenova into the Company. These synergies include operating efficiencies and strategic benefits projected to be achieved as a result of the Metenova Acquisition. Substantially all of the goodwill recorded is expected to be nondeductible for income tax purposes. Intangible Assets The following table sets forth the components of the identified intangible assets associated with the Metenova Acquisition and their estimated useful lives:
|  | Useful life |  | Fair Value |
|  |  |  | (Amounts in thousands) |
Customer relationships |  | 15 years |  | $ | 12,659 |
Developed technology |  | 15 years |  |  | 44,377 |
Trademark and tradename |  | 15 years |  |  | 939 |
Non-competition agreements |  | 2 years |  |  | 787 |
|  |  |  | $ | 58,762 |
FlexBiosys, Inc. On April 17, 2023, the Company completed its acquisition of all of the outstanding equity interests in FlexBiosys, pursuant to an Equity Purchase Agreement (the “FlexBiosys Agreement”) with FlexBiosys, TSAP Holdings Inc. (“NJ Seller”), Gayle Tarry and Stanley Tarry, as individuals (collectively with NJ Seller, the "Sellers"), and Stanley Tarry, in his capacity as the representative of the Sellers (the “FlexBiosys Acquisition”). FlexBiosys, which is headquartered in Branchburg, New Jersey, offers expert design and custom manufacturing of single-use bioprocessing products and a comprehensive range of products that include bioprocessing bags, bottles, and tubing assemblies. These products will complement and expand our fluid management portfolio of offerings. Consideration transferred The FlexBiosys Acquisition was accounted for as a purchase of a business under ASC 805, and the Company engaged a third-party valuation firm to assist with the valuation of FlexBiosys. Under the terms of the FlexBiosys Agreement, all outstanding equity interests of FlexBiosys were acquired for consideration with a value totaling $41.0 million. The FlexBiosys Acquisition was funded through payment of $29.0 million in cash, which includes $6.3 million deposited in escrow for future payments, the issuance of 31,415 unregistered shares of the Company's common stock totaling $5.4 million and contingent consideration with fair value of approximately $6.6 million. Under the acquisition method of accounting, the assets acquired and liabilities assumed of FlexBiosys were recorded as of the acquisition date, at their respective fair values, and consolidated with those of the Company. The fair value of the net assets acquired is $14.1 million, the fair value of the intangible assets acquired is $12.6 million and the residual goodwill is $14.3 million. Acquisition-related costs are not included as a component of consideration transferred but are expensed in the periods in which costs are incurred. The Company has incurred $1.1 million of transaction and integration costs associated with the FlexBiosys Acquisition from the date of acquisition to September 30, 2024. There were no transaction and integration costs incurred for the FlexBiosys Acquisition during the three and nine months ended September 30, 2024. Fair Value of Net Assets Acquired The allocation of purchase price is based on the fair value of assets acquired and liabilities assumed as of the acquisition date, based on the final valuation of FlexBiosys. The Company has made appropriate adjustments to the purchase price allocation during the measurement period, which ended on April 17, 2024. The purchase price allocation was completed as of March 31, 2024. The components and final allocation of the purchase price consist of the following (amounts in thousands):
Cash and cash equivalents |  | $ | 1,090 |
Accounts receivable |  |  | 683 |
Inventory |  |  | 667 |
Prepaid expenses and other current assets |  |  | 35 |
Property and equipment |  |  | 12,034 |
Operating lease right of use asset |  |  | 3,537 |
Customer relationships |  |  | 2,530 |
Developed technology |  |  | 9,860 |
Trademark and tradename |  |  | 30 |
Non-competition agreements |  |  | 220 |
Goodwill |  |  | 14,321 |
Other noncurrent assets |  |  | 10 |
Accounts payable |  |  | (136 | )
Accrued liabilities |  |  | (314 | )
Operating lease liability |  |  | (39 | )
Noncurrent operating lease liability |  |  | (3,498 | )
Fair value of net assets acquired |  | $ | 41,030 |
Acquired Goodwill The goodwill of $14.3 million represents future economic benefits expected to arise from anticipated synergies from the integration of FlexBiosys into the Company. These synergies include operating efficiencies and strategic benefits projected to be achieved as a result of the FlexBiosys Acquisition. Substantially all of the goodwill recorded is expected to be deductible for income tax purposes. Intangible Assets The following table sets forth the components of the identified intangible assets associated with the FlexBiosys Acquisition and their estimated useful lives:
|  | Useful life |  | Fair Value |
|  |  |  | (Amounts in thousands) |
Customer relationships |  | 12 years |  | $ | 2,530 |
Developed technology |  | 16 years |  |  | 9,860 |
Trademark and tradename |  | 4 years |  |  | 30 |
Non-competition agreements |  | 5 years |  |  | 220 |
|  |  |  | $ | 12,640 |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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