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Acquisitions | 9 Months Ended
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Mar. 29, 2025
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Acquisitions | Note 5. Acquisitions Inertial Labs, LLC On January 28, 2025, the Company acquired all of the equity of Inertial Labs, LLC (Inertial Labs), a privately held company which specializes in Position, Navigation and Timing (PNT) solutions for aerospace, defense and industrial applications. The acquisition enables the Company to further broaden its solutions offering into the rapidly developing PNT landscape. The total purchase consideration includes approximately $134.4 million paid in cash at closing and additional contingent consideration of up to $175.0 million. The net cash paid for the acquisition was $117.9 million, which reflects the cash paid at closing less cash acquired of $16.5 million. The future cash payments for the additional contingent consideration are dependent on the achievement of certain revenue targets over the course of a four-year period beginning in January 2025. From the contingent consideration of $175.0 million, $3.4 million shall be set aside for the payment of retention bonuses over the four-year earn-out period to key personnel and service providers, contingent on continued service to the Company. Any forfeited amount will be removed from the retention bonus pool and re-distributed to the shareholders of Inertial Labs upon the achievement of the earn-out targets. The portion of the estimated fair value of the earn-out liability allocated to the retention bonuses will be accounted for as post combination expense over the requisite service period. The cash consideration paid at closing includes an escrow payment of $1.0 million subject to final net working capital adjustments. There was an additional $3.0 million held back by the Company for final net working capital adjustments, included in Other current liabilities on the Consolidated Balance Sheets. In addition, the Company held back $15.0 million for indemnity claims included in Other non-current liabilities on the Consolidated Balance Sheets. The acquisition meets the definition of a business and has been accounted for in accordance with the authoritative guidance on business combinations; therefore, the tangible and intangible assets acquired and liabilities assumed were recorded at fair value on the acquisition date. Acquisition related costs incurred were approximately $11.7 million and have been recorded within SG&A in the Consolidated Statements of Operations. These costs included $9.5 million in transaction bonuses that were paid at closing to key personnel and service providers of Inertial Labs. The total purchase consideration was allocated to tangible and intangible assets acquired and liabilities assumed based on the preliminary fair value on the acquisition date. The following table presents the preliminary allocation of the purchase price (in millions):
|  |  | Amount |  |
Cash and cash equivalents |  |  | $ | 16.5 |  |  |
Accounts receivable, net |  |  | 8.1 |  |  |
Inventory, net |  |  | 26.0 |  |  |
Prepayments and other current assets |  |  | 1.2 |  |  |
Property, plant and equipment, net |  |  | 2.3 |  |  |
Goodwill |  |  | 129.7 |  |  |
Identified intangible assets acquired |  |  | 117.6 |  |  |
Other non-current assets |  |  | 1.9 |  |  |
Accounts payable |  |  | (1.4) |  |  |
Accrued payroll and related expenses |  |  | (0.5) |  |  |
Deferred revenue |  |  | (0.3) |  |  |
Accrued expenses |  |  | (3.5) |  |  |
Other non-current liabilities |  |  | (28.0) |  |  |
Total purchase consideration |  |  | $ | 269.6 |  |  |
The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in millions, except useful life):
| Estimated Useful Life |  | Amount |  |
Developed technology | 4 to 7 years |  | $ | 102.0 |  |  |
Customer relationship | 6 years |  | 9.6 |  |  |
Tradename | 3 years |  | 0.8 |  |  |
Backlog | 2 years |  | 5.2 |  |  |
Total identifiable assets acquired |  |  | $ | 117.6 |  |  |
Goodwill represents the excess of the preliminary estimated purchase consideration over the preliminary estimates of the fair value of the net tangible and intangible assets acquired and has been allocated to the Network Enablement segment. Goodwill is primarily attributable to expected synergies in the acquired technologies that may be leveraged by the Company in future PNT offerings. None of the goodwill recognized is deductible for U.S. income tax purposes. The Company has included the financial results of Inertial Labs in its Consolidated Financial Statements from the date of acquisition. Pro forma results of operations have not been presented because the effect of the acquisition was not material to the Consolidated Statements of Operations. Jackson Labs Technologies, LLC On October 5, 2022, the Company acquired all of the equity of Jackson Labs Technologies, LLC (Jackson Labs), a privately held company, which specializes in PNT solutions for critical infrastructure serving both military and civilian applications. The acquisition enables the Company to broaden its solutions offering into the rapidly developing PNT landscape. The total purchase consideration included approximately $49.9 million paid in cash at closing and additional contingent consideration of up to $117.0 million for which future cash payments are dependent on the achievement of certain operational and revenue targets over the course of a three-year period beginning in January 2023. The cash consideration paid at closing included escrow payments of $5.0 million for indemnity holdback and $2.0 million subject to final cash and net working capital adjustments. The acquisition has been accounted for in accordance with the authoritative guidance on business combinations; therefore, the tangible and intangible assets acquired and liabilities assumed were recorded at fair value on the acquisition date. In connection with this acquisition, the Company recorded approximately $48.3 million of goodwill and $30.6 million of developed technology and other intangibles. The acquired developed technology and other intangible assets are being amortized over their estimated useful lives ranging from one to six years. Acquisition related costs incurred were approximately $0.8 million and have been recorded within SG&A expense in the Consolidated Statements of Operations in fiscal year 2023. Goodwill represents the excess of the preliminary estimated purchase consideration over the preliminary estimates of the fair value of the net tangible and intangible assets acquired and has been allocated to the Network Enablement segment. Goodwill is primarily attributable to expected synergies in the acquired technologies that may be leveraged by the Company in future PNT offerings. The goodwill was deductible for U.S. income tax purposes in the year of acquisition. The Company has included the financial results of Jackson Labs in its Consolidated Financial Statements from the date of acquisition. Pro forma results of operations have not been presented because the effect of the acquisition was not material to the Consolidated Statements of Operations. Other Acquisitions On March 2, 2025, the Company entered into a purchase agreement to acquire Spirent Communications plc’s high speed ethernet and network security business lines, for $410 million in base consideration and an additional $15 million contingent consideration to be paid at closing, subject to customary closing adjustments and conditions. The Company expects to fund this transaction with proceeds from a Term Loan B. The acquisition is conditional on regulatory approvals and is expected to close by July 31, 2025. On March 29, 2023, April 21, 2023 and June 8, 2023, the Company completed acquisitions accounted for as asset purchases consisting of an aggregate cash paid at closing of $2.9 million and $0.2 million of indemnity holdback. In connection with these acquisitions, the Company recorded developed technology intangibles of $2.5 million, which are being amortized over their estimated useful life of 5 years. On July 18, 2022, the Company completed an acquisition accounted for as a business combination consisting of cash paid at closing of $17.5 million and $2.0 million of indemnity holdback. In connection with this acquisition, the Company recorded approximately $11.2 million of goodwill, $5.1 million of developed technology and $1.8 million of deferred tax liability. The acquired developed technology asset is being amortized over its estimated useful life of 4 years. Acquisition related Contingent Consideration The following table provides a reconciliation of changes in the fair value of the Company’s earn-out liabilities associated with the Company’s acquisitions for the three and nine months ended March 29, 2025 and March 30, 2024 (in millions):
|  | Three Months Ended |  | Nine Months Ended
|  | March 29, 2025 |  | March 30, 2024 |  | March 29, 2025 |  | March 30, 2024
Beginning period balance |  | $ | 2.1 |  |  | $ | 10.6 |  |  | $ | 9.5 |  |  | $ | 19.7 |
Additions to contingent consideration |  | 116.2 |  |  | — |  |  | 116.2 |  |  | — |
Payment of contingent consideration |  | — |  |  | — |  |  | — |  |  | (0.7) |
Fair value adjustment |  | 2.5 |  |  | 0.6 |  |  | (4.9) |  |  | (7.8) |
Ending period balance |  | $ | 120.8 |  |  | $ | 11.2 |  |  | $ | 120.8 |  |  | $ | 11.2 |

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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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