XML 18 R9.htm IDEA: XBRL DOCUMENT
v3.20.1

BUSINESS ACQUISITIONS | 3 Months Ended
--- | ---
Mar. 31, 2020
BUSINESS ACQUISITIONS |
BUSINESS ACQUISITIONS | NOTE 2. BUSINESS ACQUISITIONS Artesyn’s Embedded Power Business In September 2019, we completed the acquisition of Artesyn Embedded Technologies, Inc.’s (“Artesyn”) Embedded Power business pursuant to the Stock Purchase Agreement, dated May 14, 2019 as amended (the “Acquisition Agreement”). Pursuant to the Acquisition Agreement, we acquired all of Artesyn’s issued and outstanding shares for a purchase price of $361.3 million including the assumption of certain liabilities and subject to an adjustment for net working capital. In connection with the Acquisition Agreement, we entered into a credit agreement that provided us with aggregate financing of $500.0 million which was used to partially fund the Artesyn acquisition. See Note 22. Credit Facility for additional details related to the credit agreement. Artesyn’s Embedded Power business is one of the world’s largest providers of highly engineered, application-specific power supplies for demanding applications. This acquisition diversified our product portfolio and gave us access to additional growth markets, including hyperscale data centers, telecom infrastructure in next generation 5G networks, embedded industrial power applications and medical power for diagnostic and treatment applications. The components of the fair value of the total consideration transferred for the acquisition is as follows: ​
​ | ​ | ​ | ​
​ |  | ​ | ​
Cash paid for acquisition | ​ | $ | 389,326
Non-cash consideration | ​ |  | 2,000
Contingent consideration and working capital adjustments | ​ | ​ | (6,848)
Total fair value of consideration transferred | ​ | ​ | 384,478
Less cash acquired | ​ |  | (23,225)
Total purchase price | ​ | $ | 361,253
​ The following table summarizes the estimated preliminary fair values of the assets acquired and liabilities assumed from the acquisition, along with the measurement period adjustments that occurred during the quarter: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Preliminary: September 10, 2019 | ​ | Measurement Period Adjustments | ​ | Preliminary: September 10, 2019
Accounts and other receivable, net | ​ | $ | 128,221 | ​ | $ | 4,245 | ​ | $ | 132,466
Inventories | ​ |  | 139,778 | ​ | ​ | 16,629 | ​ | ​ | 156,407
Property and equipment | ​ |  | 63,032 | ​ | ​ | 289 | ​ | ​ | 63,321
Operating lease right-of-use assets | ​ | ​ | 60,073 | ​ | ​ | (5,634) | ​ | ​ | 54,439
Goodwill | ​ |  | 113,040 | ​ | ​ | (421) | ​ | ​ | 112,619
Intangible assets | ​ |  | 124,000 | ​ | ​ | - | ​ | ​ | 124,000
Other assets | ​ |  | 64,018 | ​ | ​ | (155) | ​ | ​ | 63,863
Total assets acquired | ​ |  | 692,162 | ​ | ​ | 14,953 | ​ | ​ | 707,115
Accounts payable | ​ |  | 144,702 | ​ | ​ | 7,933 | ​ | ​ | 152,635
Operating lease liability | ​ | ​ | 60,111 | ​ | ​ | (5,634) | ​ | ​ | 54,477
Pension liability | ​ | ​ | 48,686 | ​ | ​ | (371) | ​ | ​ | 48,315
Deferred income tax liabilities | ​ |  | 5,846 | ​ | ​ | 24 | ​ | ​ | 5,870
Other liabilities | ​ |  | 71,564 | ​ | ​ | 13,001 | ​ | ​ | 84,565
Total liabilities assumed | ​ |  | 330,909 | ​ | ​ | 14,953 | ​ | ​ | 345,862
Total fair value of net assets acquired | ​ | $ | 361,253 | ​ | $ | - | ​ | $ | 361,253
​ A summary of the intangible assets acquired, amortization method and estimated useful lives are as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ |  | Amortization |  | ​ | ​
​ | ​ | Artesyn | ​ | Method | ​ | Useful Life | ​
Technology | ​ | $ | 28,000 |  | Straight-line |  | 5 | ​
Customer relationships | ​ |  | 75,000 |  | Straight-line |  | 15 | ​
Tradename | ​ |  | 21,000 |  | Straight-line |  | 10 | ​
Total | ​ | $ | 124,000 |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ Goodwill and intangible assets are recorded in the functional currency of the entity and are subject to changes due to translation at each balance sheet date. The goodwill represents expected operating synergies from combining operations with the acquired company and the estimated value associated with the enhancements to our comprehensive product lines and access to new markets. Advanced Energy is still evaluating the fair value for the assets acquired and liabilities assumed related to the Artesyn acquisition. Accordingly, the purchase price allocation presented above is preliminary. ​ Pro forma results for Advanced Energy Inc. giving effect to the Artesyn Embedded Power Business Transactions The following unaudited pro forma financial information presents the combined results of operations of Advanced Energy and Artesyn as if the acquisition had been completed at the beginning of fiscal year 2019. The unaudited pro forma financial information is presented for informational purposes and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place at the beginning of the year prior to the acquisition dates, nor are they indicative of future results. ​ The unaudited pro forma financial information for the three months ended March 31, 2019 combines Advanced Energy’s results with the pre-acquisition results of Artesyn for that period. The following table presents our unaudited pro forma results for the acquisition of Artesyn for the three months ended March 31, 2019: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended March 31,
​ | ​ | 2019
​ |  | As Reported |  | Pro Forma
Total sales |  | $ | 140,743 |  | $ | 295,975
Net income attributable to Advanced Energy Industries, Inc. |  | $ | 15,370 |  | $ | 21,544
Earnings per share: |  | ​ | ​ |  | ​ | ​
Basic earnings per share | ​ | $ | 0.40 | ​ | $ | 0.56
Diluted earnings per share | ​ | $ | 0.40 | ​ | $ | 0.56
​ The unaudited pro forma results for all periods presented include adjustments made to account for certain costs and transactions that would have been incurred had the acquisitions been completed at the beginning of the year prior to the year of acquisition. These include adjustments to amortization charges for acquired intangible assets, interest and financing expenses, transaction costs, amortization of purchased gross profit and the alignment of various accounting policies. These adjustments are net of any applicable tax impact and were included to arrive at the pro forma results above. Artesyn’s operating results have been included in the Advanced Energy’s operating results for the periods subsequent to the completion of the acquisition on September 10, 2019. Artesyn contributed total sales of $153.9 million and net loss of $1.0 million for the three months ended March 31, 2020.

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration