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Acquisitions | 3 Months Ended
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Apr. 03, 2022
Business Combination and Asset Acquisition [Abstract] |
Acquisitions | Acquisitions NetModule AG We acquired NetModule AG (NetModule) on March 3, 2022 for a preliminary purchase price, net of cash acquired of $23.5 million, which was funded with cash on hand. NetModule, based in Bern, Switzerland, is a leading provider of reli able, fast and secure wireless network infrastructures through advanced capabilities in 5G and WiFi6 technologies in a variety of mission critical industries with a strong focus on mass transit and intelligent traffic systems within the transportation vertical. The results of NetModule have been included in our Condensed Consolidated Financial Statements from March 3, 2022, and are reported within the Industrial Automation Solutions segment. The NetModule acquisition was not material to our financial position or results of operations. macmon secure GmbH We acquired macmon secure GmbH (Macmon) on January 17, 2022, for a preliminary purchase price, net of cash acquired of $42.4 million, which was funded with cash on hand. Macmon, based in Berlin, Germany, is a leading provider of products and services that secure network infrastructures in a variety of mission critical industries. The results of Macmon have been included in our Condensed Consolidated Financial Statements from January 17, 2022, and are reported within the Industrial Automation Solutions segment. The Macmon acquisition was not material to our results of operations. The following table summarizes the estimated, preliminary fair values of the assets acquired and the liabilities assumed as of January 17, 2022 (in thousands):
Receivables |  | $ | 1,836 |
Other current assets |  | 173 |
Property, plant and equipment |  | 160 |
Intangible assets |  | 22,248 |
Goodwill |  | 31,258 |
Operating lease right-of-use assets |  | 2,979 |
Total assets acquired |  | $ | 58,654 |
Accounts payable |  | $ | 371 |
Accrued liabilities |  | 4,079 |
Deferred income taxes |  | 5,828 |
Long-term operating lease liabilities |  | 2,534 |
Other long-term liabilities |  | 3,401 |
Total liabilities assumed |  | $ | 16,213 |
Net assets |  | $ | 42,441 |
The above purchase price allocation is preliminary and subject to revision as additional information about the fair value of individual assets and liabilities becomes available. The preliminary measurement of receivables, intangible assets, goodwill, deferred income taxes, and other assets and liabilities are subject to change. A change in the estimated fair value of the net assets acquired will change the amount of the purchase price allocable to goodwill. The preliminary fair value of acquired receivables is $1.8 million, which is equivalent to its gross contractual amount. A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. The judgments we have used in estimating the preliminary fair values assigned to each class of acquired assets and assumed liabilities could materially affect the results of our operations. For purposes of the above allocation, we based our preliminary estimate of the fair values for intangible assets on valuation studies performed by a third party valuation firm. We used various valuation methods including discounted cash flows, lost income, excess earnings, and relief from royalty to estimate the preliminary fair value of the identifiable intangible assets (Level 3 valuation). Goodwill and other intangible assets reflected above were determined to meet the criteria for recognition apart from tangible assets acquired and liabilities assumed. The goodwill is primarily attributable to the expansion of industrial automation product offerings in complete end-to-end solutions. Our tax basis in the acquired goodwill is zero. The intangible assets related to the Macmon acquisition consisted of the following:
|  | Fair Value |  | Amortization Period
|  | (In thousands) |  | (In years)
Intangible assets subject to amortization: |  |  |  |
Developed technologies |  | $ | 18,825 |  |  | 4.0
Customer relationships |  | 2,282 |  |  | 15.0
Trademarks |  | 1,141 |  |  | 2.0
Total intangible assets subject to amortization |  | $ | 22,248 |  |  |
Intangible assets not subject to amortization: |  |  |  |
Goodwill |  | $ | 31,258 |  |  | n/a
Total intangible assets not subject to amortization |  | $ | 31,258 |  |  |
Total intangible assets |  | $ | 53,506 |  |  |
Weighted average amortization period |  |  |  | 5.0
The amortizable intangible assets reflected in the table above were determined by us to have finite lives. The useful life for the developed technology intangible asset was based on the estimated time that the technology provides us with a competitive advantage and thus approximates the period and pattern of consumption of the intangible asset. The useful life for the customer relationship intangible asset was based on our forecasts of estimated sales from recurring customers. The useful life for the trademarks was based on the period of time we expect to continue to go to market using the trademarks. Opterna International Corp. Our acquisition of Opterna International Corp. (Opterna) in 2019 included potential earn-out consideration. As of the acquisition date, we estimated the fair value of the earn-out to be $5.8 million. The earn-out period ended in 2021, and the financial targets tied to the earn-out were not achieved. We reduced the earn-out liability to zero and recognized a $5.8 million benefit in Selling, General and Administrative Expenses in the three months ended April 4, 2021. This benefit was excluded from Segment EBITDA of our Enterprise Solutions segment.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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