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Acquisitions | 6 Months Ended
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Jun. 30, 2023
Business Combinations [Abstract] |
Acquisitions | 5. Acquisitions The Company has not presented pro forma financial information reflecting all acquisitions because the impact, individually and collectively, on revenues and net income is not material. The Company does not expect the amounts allocated to goodwill that are attributable to expected synergies to be deductible for tax purposes. 2023 Biognosys, AG On January 3, 2023, the Company acquired 97.15% of the outstanding stock of Biognosys, AG (“Biognosys”), a privately held company, for a purchase price of CHF 75 million (approximately $80.1 million) less assumed liability for employee awards of CHF 5.9 million (approximately $6.3 million). Biognosys offers mass spectrometry based next-generation proteomics contract research services as well as proprietary proteomics software and laboratory consumables to support academic, pharma and biotech research and clinical development. Biognosys is domiciled in Zurich, Switzerland, and was integrated into the BSI CALID Segment. Concurrent with the acquisition, the Company entered into an agreement with the noncontrolling interest holders that provides the Company with the right to purchase, and the noncontrolling interest holders with the right to sell, the remaining 2.85% of Biognosys for cash to the founders at a contractually defined redemption value exercisable beginning in 2028. The option price to acquire the remaining 2.85% equity interest will have a minimum redemption, or floor, value at each purchase or sell date, subject to post combination employment. The fair value at acquisition date of these put option rights has been bifurcated into two financial instruments to separately account for the amounts attributable to the put option rights to sell the non-controlling interests on exercise dates at (1) above the minimum redemption value and (2) the minimum redemption value or floor value that is subject to post combination employment (the hybrid instrument) services. The rights (embedded derivative) to the option shares can be sold at a minimum redemption value provided certain post combination employment services are met or at fair value, if above the floor, on the purchase or sell date. Therefore, the portion assigned to the minimum redemption value of option value of the hybrid instrument, which is tied to continued employment of the noncontrolling interest holders, was classified as a long-term liability on the consolidated balance sheet. The hybrid instrument was initially measured at fair value on the acquisition date and shall be accreted over the post combination service period. The acquisition date fair value of the hybrid instrument which is an embedded derivative was not material. The rights associated with the portion of the noncontrolling interest above the minimum redemption value are contingently redeemable at the option of the Company or the noncontrolling interest holders. As redemption of the rights is contingently redeemable at the option of the noncontrolling interest shareholders, the Company classifies the carrying amount of these rights in the mezzanine section on the consolidated balance sheet, which is presented above the equity section and below liabilities. The redeemable noncontrolling interest is initially measured at fair value on acquisition date and subsequently at the greater of the amount that would be paid if settlement occurred as of the balance sheet date based on fair value as defined in the purchase agreement and its carrying amount adjusted for net income (loss) attributable to the noncontrolling interest. Adjustments to the carrying value of the redeemable noncontrolling interest are recorded through retained earnings. The amortization period for the intangible assets acquired is seven years for the technology and nine years for the customer relationships. The trade name was determined to have an indefinite life. The Company expects to amortize backlog through the end of 2025. The components and fair value allocation of the consideration transferred in connection with the acquisition are as follows (in millions):
Consideration Transferred: |  |  |
Cash paid |  | $ | 73.6 |
Cash acquired |  |  | (9.5 | )
Holdback |  |  | 0.2 |
Fair value of redeemable noncontrolling interest |  |  | 2.5 |
Total consideration transferred |  | $ | 66.8 |
Allocation of Consideration Transferred: |  |  |
Accounts receivable |  | $ | 3.6 |
Inventories |  |  | 0.4 |
Other current assets |  |  | 0.9 |
Property, plant and equipment |  |  | 8.0 |
Other assets |  |  | 4.2 |
Intangible assets: |  |  |
Technology |  |  | 10.2 |
Customer relationships |  |  | 13.8 |
Trade name |  |  | 2.7 |
Backlog |  |  | 0.8 |
Goodwill |  |  | 47.7 |
Liabilities assumed (a) |  |  | (25.5 | )
Total consideration allocated |  | $ | 66.8 |
(a) This amount includes assumed liability for employee awards of $6.3 million on acquisition date and was settled in the post-closing period ended March 31, 2023. Zontal, Inc. On May 4, 2023, the Company acquired 60% of the outstanding share capital of OSTHUS Beteiligungs GmbH and its wholly-owned subsidiaries: Osthus Group GmbH, Zontal Inc., Zontal GmbH, and Zontal Data Information Technology (Dalian) co., Ltd, (hereinafter, the “Zontal Companies”) for EUR 13.4 million (approximately $14.8 million) with the potential for additional consideration of up to $14.4 million if certain revenue and EBITDA targets are met through 2025. Zontal, Inc, is the main operating company. The Zontal Companies offer various software applications and integrations included data management (Informatics and SDMS), which enables customers to harmonize, preserve and reuse their data to generate efficiencies and automate workflows. The Zontal Companies are domiciled in Aachen, Germany, and are integrated into the BSI BioSpin Segment. Concurrent with the acquisition, the Company entered into an agreement with the noncontrolling interest holders that provides the Company with the right to purchase, and the noncontrolling interest holders with the right to sell, the remaining 40% of the Zontal Companies at a contractually defined redemption value exercisable beginning in 2027 and in 2031. The rights (embedded derivative) to the option shares can be exercised at a discounted redemption value upon certain events related to post combination employment services. As the options are tied to continued employment, the Company classified the hybrid instrument (noncontrolling interest with an embedded derivative) as a long-term liability on the consolidated balance sheet. The hybrid instrument associated with the options is initially measured at fair value on the acquisition date. Subsequent to the acquisition, the carrying value of the hybrid instrument is remeasured to fair value with changes recorded to stock-based compensation expense in proportion to the requisite service period vested. The amortization period for the intangible assets acquired is eight years for technology, ten years for the trade name, and thirteen years for the customer relationships. The Company expects to amortize backlog through 2023. The components and fair value allocation of the consideration transferred in connection with the acquisition are as follows (in millions):
Consideration Transferred: |  |  |
Cash paid |  | $ | 14.8 |
Cash acquired |  |  | (0.2 | )
Fair value of contingent consideration |  |  | 0.5 |
Fair value of hybrid liability |  |  | 18.5 |
Total consideration transferred |  | $ | 33.6 |
Allocation of Consideration Transferred: |  |  |
Accounts receivable |  | $ | 0.7 |
Other current assets |  |  | 0.3 |
Other assets |  |  | 1.2 |
Intangible assets: |  |  |
Technology |  |  | 5.8 |
Customer relationships |  |  | 4.0 |
Trade name |  |  | 1.1 |
Backlog |  |  | 0.2 |
Goodwill |  |  | 27.4 |
Liabilities assumed |  |  | (7.1 | )
Total consideration allocated |  | $ | 33.6 |
In the six months ended June 30, 2023, the Company acquired various other businesses which were accounted for under the acquisition method that complemented the Company’s existing product offerings. The following table reflects the consideration transferred and the respective reporting segment for the acquisitions (in millions):
Name of Acquisition |  | Date Acquired |  | Segment |  | Total Consideration |  |  | Cash Consideration |
Acquifer Imaging GmbH and Deltabyte GmbH |  | January 4, 2023 |  | BSI NANO |  | $ | 7.6 |  |  | $ | 7.6 |
Other majority owned acquisitions |  | Various |  | BSI CALID |  |  | 19.1 |  |  |  | 12.2 |
|  |  |  |  |  | $ | 26.7 |  |  | $ | 19.8 |
In the six months ended June 30, 2023, the Company completed strategic investments that complemented the Company's existing product offerings. The following table reflects the consideration transferred and the respective reporting segment for the investments (in millions):
Name |  | Acquisition / Investment |  | Financial Statement Classification |  | Date Acquired |  | Segment |  | Total Consideration |  |  | Cash Consideration |
Other Investments |  | Investment |  | Other long-term assets |  | Various |  | Various |  | $ | 9.2 |  |  | $ | 9.2 |
|  |  |  |  |  |  |  |  |  | $ | 9.2 |  |  | $ | 9.2 |
In the three and six months ended June 30, 2023, the Company recorded a realized gain of $6.8 million from the sale of a strategic investment. In the six months ended June 30, 2022, the Company recorded an unrealized gain of $1.7 million from the remeasurement of a strategic investment upon the occurrence of an observable transaction. The realized and unrealized gain is included in “Interest and other income (expense), net” in the Consolidated Statements of Income and Comprehensive Income. Equity-method investments The Company's investment in Tofwerk, AG and Eliptica Limited amount to an equity investment in common stock of 40% and 20%, respectively, and are accounted for using the equity-method of accounting. The Company accounts for the investments under the equity method if the Company has the ability to exercise significant influence, but not control, over an investee. Investments in equity-method investees are included within “Other long-term assets” in the consolidated balance sheets. The Company's proportional share of the earnings or losses as reported by equity-method investees are classified as “Equity in income of unconsolidated investees, net of tax” in the consolidated statements of income and comprehensive income. The Company regularly evaluates these investments, which are not carried at fair value, for other-than-temporary impairment. The Company records investments, including incremental investments, of shares in equity-method investees at cost. In the event the Company no longer has the ability to exercise significant influence over an equity-method investee, the Company would discontinue accounting for the investment under the equity method. On a quarterly basis, the Company reviews strategic investments and equity method investments to determine if there have been any events and conditions that could indicate an impairment or other-than temporary impairment. For the three months ended June 30, 2023, the Company recognized a $11.4 million impairment charge in “Interest and other income (expense), net” in the Consolidated Statements of Income and Comprehensive Income, to write down the carrying value of certain strategic investments. For the six months ended June 30, 2023, the Company recognized a $18.3 million impairment charge in “Interest and other income (expense), net” in the Consolidated Statements of Income and Comprehensive Income, to write down the carrying value of certain strategic investments. Subsequent Events - Acquisitions On July 26, 2023, the Company acquired a 3.28% diluted equity interest in Tome Biosciences Inc. for $10.0 million.

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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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