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ACQUISITIONS | 12 Months Ended
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Dec. 31, 2022
ACQUISITIONS |
ACQUISITIONS | NOTE 2. ACQUISITIONS SL Power Electronics Corporation On April 25, 2022, we acquired 100% of the issued and outstanding shares of capital stock of SL Power Electronics Corporation (“SL Power”), which is based in Calabasas, California. We accounted for this transaction as a business combination. This acquisition added complementary products to Advanced Energy’s medical power offerings and extends our presence in several advanced industrial markets. The components of the fair value of the total consideration transferred were as follows: ​
​ | ​ | ​ | ​
Cash paid for acquisition |  | $ | 145,616
Less cash acquired | ​ | ​ | (3,484)
Total fair value of purchase consideration | ​ | $ | 142,132
​ We allocated the purchase consideration to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess allocated to goodwill. ​
​ | ​ | ​ | ​
​ |  | Fair Value
Current assets and liabilities, net | ​ | $ | 11,990
Property and equipment | ​ | ​ | 4,191
Operating lease right-of-use assets | ​ | ​ | 4,640
Deferred taxes and other liabilities | ​ | ​ | (2,335)
Intangible assets | ​ | ​ | 57,600
Goodwill | ​ | ​ | 70,686
Operating lease liability | ​ | ​ | (4,640)
Total fair value of net assets acquired | ​ | $ | 142,132
​ The following table summarizes the intangible assets acquired: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ |  | Amortization |  | Useful Life
​ | ​ | Fair Value | ​ | Method | ​ | (in years)
Customer relationships | ​ | $ | 50,500 |  | Straight-line |  | 10
Technology | ​ |  | 7,100 |  | Straight-line |  | 5
Total | ​ | $ | 57,600 |  |  |  |
​ To estimate the fair value of intangible assets, we used a multi-period excess earnings approach for the customer relationships and a relief from royalty approach for developed technology. Goodwill represents SL Power’s assembled workforce and the expected operating synergies from combining operations. We expect approximately 85% of goodwill to be deductible for tax purposes. We are still evaluating the fair value for the assets acquired and liabilities assumed. Accordingly, the purchase price allocation presented above is preliminary. We included SL Power’s results of operations in our consolidated financial statements from the date of acquisition. The following table summarizes SL Power’s contribution to sales in our Consolidated Statements of Operations. ​
​ | ​ | ​ | ​
​ | ​ | Year Ended December 31,
​ |  | 2022
Sales, net | ​ | $ | 50,321
​ TEGAM, Inc. On June 1, 2021, we acquired 100% of the issued and outstanding shares of capital stock of TEGAM, Inc., which is based in Geneva, Ohio. We accounted for this transaction as a business combination. This acquisition added metrology and calibration instrumentation to Advanced Energy’s RF process power solutions in our Semiconductor and Industrial and Medical markets. The components of the fair value of the total consideration transferred were as follows: ​
​ | ​ | ​ | ​
Cash paid at closing |  | $ | 15,430
Cash paid for indemnity holdback released in June 2022 | ​ | ​ | 1,800
Less cash acquired | ​ | ​ | (177)
Total fair value of purchase consideration | ​ | $ | 17,053
​ We allocated the purchase consideration to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess allocated to goodwill. ​
​ | ​ | ​ | ​
​ |  | ​ Fair Value
Current assets and liabilities, net | ​ | $ | 3,475
Property and equipment | ​ | ​ | 755
Operating lease right-of-use assets | ​ | ​ | 425
Intangible assets | ​ | ​ | 6,900
Goodwill (deductible for tax purposes) | ​ | ​ | 5,917
Other | ​ | ​ | 6
Operating lease liability | ​ | ​ | (425)
Total fair value of net assets acquired | ​ | $ | 17,053
​ A summary of the intangible assets acquired, amortization method, and estimated useful lives follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Fair Value |  | Amortization Method |  | Useful Life (in years)
Technology | ​ | $ | 1,100 |  | Straight-line |  | 5
Customer relationships | ​ |  | 5,500 |  | Straight-line |  | 15
Tradename | ​ |  | 300 |  | Straight-line |  | 5
Total | ​ | $ | 6,900 |  |  |  |
​ Goodwill represents TEGAM’s assembled workforce and the expected operating synergies from combining operations. We included TEGAM’s results of operations in our consolidated financial statements from the date of acquisition. Intangible Assets Acquired In January 2021, we acquired certain intangible assets related to the manufacturing of fiber optic sensing equipment for a total purchase price of $6.5 million in cash. These intangible assets have an estimated useful life of five years. See Note 13. Intangible Assets for additional details.

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