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Business Combination | 3 Months Ended
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Mar. 31, 2023
Business Combination |
Business Combination | Note 3 — Business Combination ​ Epiluvac ​ On January 31, 2023, the Company acquired Epiluvac AB, a privately held manufacturer of chemical vapor deposition (CVD) epitaxy systems that enable silicon carbide (SiC) applications in the electric vehicle market. This acquisition is expected to accelerate penetration into the emerging, high-growth SiC equipment market. The results of Epiluvac’s operations have been included in the consolidated financial statements since the date of acquisition. ​ The acquisition date fair value of the consideration totaled $56.4 million, net of cash acquired, which consisted of the following: ​
​ | ​ | ​ | ​
​ |  | Acquisition Date
​ | ​ | (January 31, 2023)
​ | ​ | (in thousands)
Cash paid, net of cash acquired | ​ | $ | 30,373
Contingent consideration | ​ | ​ | 26,055
Acquisition date fair value | ​ | $ | 56,428
​ The purchase agreement included performance milestones that, if achieved, could trigger additional payments to the original selling shareholders. The aggregate fair value of the contingent consideration arrangement at the acquisition date was $26.1 million, of which $9.6 million was included in “Accrued expenses and other current liabilities” and $16.5 million was included within “Other liabilities” on the Consolidated Balance Sheet as of March 31, 2023. The contingent arrangements include payments up to $15.0 million based on the timely completion of certain defined milestones tied to strategic targets, and up to $20.0 million based on the percentage of orders received during the defined Earn-out period. The Earn-out period is four years after the closing date of the acquisition, or earlier if certain conditions are met. ​ The Company estimated the fair value of the contingent consideration by assigning probabilities and discount factors to each of the various defined performance milestones, while using a Monte-Carlo simulation model to determine the most likely outcome for payments to be based on value of orders received. These fair value measurements are based on significant inputs not observable in the market and thus represent a Level 3 measurement as defined in ASC 820. The discount rate used was 5.54% for the strategic target and order value related contingent payments. The rate was determined based on the nature of the milestone, the risks and uncertainties involved and the time period until the milestone was measured. The determination of the various probabilities and discount factors is highly subjective, requires significant judgment and is influenced by a number of factors, including the adoption of SiC technology. While the use of SiC is expected to grow in the near future, it is difficult to predict the rate at which SiC will be adopted by the market and thus would impact the sales of our equipment. ​ The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. The amounts below are preliminary and are subject to change during the measurement period, not to exceed one year from the acquisition date: ​
​ | ​ | ​ | ​
​ |  | Acquisition Date
​ | ​ | (January 31, 2023)
​ | ​ | (in thousands)
Accounts receivable | ​ | $ | 247
Inventories | ​ |  | 391
Prepaid expense and other current assets | ​ |  | 381
Property, plant, and equipment | ​ |  | 736
Intangible assets | ​ | ​ | 28,540
Total identifiable assets acquired | ​ |  | 30,295
​ | ​ | ​ | ​
Accounts payable and accrued expenses | ​ | ​ | 656
Customer deposits and deferred revenue | ​ | ​ | 429
Deferred income taxes | ​ | ​ | 5,723
Other liabilities | ​ | ​ | 80
Total liabilities assumed | ​ |  | 6,888
​ | ​ | ​ | ​
Net identifiable assets acquired | ​ |  | 23,407
Goodwill | ​ |  | 33,021
Net assets acquired | ​ | $ | 56,428
​ The gross contractual value of the acquired accounts receivable is the amount expected to be collected by the Company, and therefore is also considered its fair value. Goodwill generated from the acquisition is primarily attributed to expected synergies from future growth and strategic advantages provided through the expansion of product offerings as well as assembled workforce and is not expected to be deductible for income tax purposes. ​ The classes of intangible assets acquired, and the estimated useful life of each class is presented in the table below: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Acquisition Date
​ | ​ | (January 31, 2023)
​ |  | Amount |  | Useful life
​ | ​ | (in thousands) | ​ | ​ | ​
Technology | ​ | $ | 28,020 |  | 15 | years
Customer relationships | ​ |  | 460 |  | 5 | years
Backlog | ​ | ​ | 60 | ​ | 1.5 | years
Intangible assets acquired | ​ | $ | 28,540 | ​ | ​ | ​
​ The Company determined the estimated fair value of the identifiable intangible assets based on various factors including cost, discounted cash flow, income method, loss-of-revenue/income method, and relief-from-royalty method in determining the purchase price allocation. The estimates are subject to change upon the finalization of the valuation analyses and if additional information about facts and circumstances that existed at the acquisition date become available during the measurement period. ​ For the three months ended March 31, 2023, the Company incurred approximately $0.7 million of acquisition related costs, included within “Selling, general, and administrative” in the Consolidated Statement of Operations. Epiluvac’s results of operations were immaterial to the Company’s Consolidated Statement of Operations for the three months ended March 31, 2023. Additionally, the pro forma Consolidated Statement of Operations as if Epiluvac had been acquired as of January 1, 2022 would not be materially different from the Company’s actual Consolidated Statement of Operations for the three months ended March 31, 2023 or 2022.

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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 https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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