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Business Acquisitions | 9 Months Ended
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Sep. 30, 2016
Business Combinations [Abstract] |
Business Acquisitions | Business Acquisitions 2016 Acquisition On January 5, 2016, the Company completed the acquisition of all of the membership interests of Aesynt pursuant to a securities purchase agreement by and among the Company and Aesynt Holding Coöperatief U.A. for total cash consideration of $271.5 million, net of cash on hand at signing of $8.2 million. Aesynt is a provider of automated medication management systems, including central pharmacy dispensing robots with storage solutions, medication storage and dispensing carts and cabinets, I.V. sterile preparation robotics and software, including software related to medication management. The Company accounted for the purchase of Aesynt 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. The following table represents the preliminary estimated allocation of the purchase price to the assets acquired and the liabilities assumed by the Company, reconciled to the purchase price transferred included in the Company's Condensed Consolidated Balance Sheet:
| (In thousands)
Cash | $ | 8,164 |
Accounts receivable | 44,084 |
Inventory | 19,690 |
Other current assets | 4,381 |
Total current assets | 76,319 |
Property and equipment | 10,389 |
Intangible assets | 123,700 |
Goodwill | 166,334 |
Other non-current assets | 968 |
Total assets | 377,710 |
Current liabilities | 26,132 |
Deferred revenue, net | 25,598 |
Non-current deferred tax liabilities | 43,927 |
Other non-current liabilities | 2,431 |
Total liabilities | 98,088 |
Total purchase price | 279,622 |
Total purchase price, net of cash received | $ | 271,458 |
The goodwill arising from this acquisition is primarily attributed to sales of future products and services and the assembled workforce of Aesynt. The Aesynt acquisition created one of the broadest product portfolio in the industry with significant offerings in automated dispensing systems, central pharmacy robotics, I.V. robotics and enterprise analytics. Goodwill has been assigned to the Automation & Analytics segment and is not deductible for tax purposes. Goodwill is not being amortized but is reviewed annually for impairment or more frequently if impairment indicators arise, in accordance with authoritative guidance. Since the acquisition, the Company adjusted the preliminary value assigned to goodwill by $1.5 million to reflect measurement period adjustments related to account receivable, inventory and current liabilities of $0.8 million, $0.4 million and $0.3 million respectively. Identifiable intangible assets (preliminary) acquired and their respective estimated remaining useful lives over which each asset will be amortized areas are as follows:
| Fair value |  | Weighted average useful life
| (In thousands) |  | (In years)
Customer relationships | $ | 58,200 |  |  | 14-16
Developed technology | 38,800 |  |  | 8
Backlog | 20,200 |  |  | 1-3
In-process research and development ("IPR&D") (1) | 3,900 |  |  | -
Non-compete | 1,800 |  |  | 3
Trade names | 800 |  |  | 1
Total purchased intangible assets | $ | 123,700 |  |  |
(1) The amortization of the in-process R&D assets begin when the in-process R&D projects are complete. Customer relationships represent the fair value of the underlying relationships and agreements with Aesynt’s customers, acquired developed technology represents the fair value of Aesynt products that have reached technological feasibility and were part of Aesynt’s product offerings at the date of acquisition, backlog represents the fair value of sales order backlog at the date of acquisition, non-compete intangible asset represents the fair value of non-compete agreements with former key members of Aesynt's management, and trade name represents the fair value of brand and name recognition associated with the marketing of Aesynt’s products and services. In-process research and development ("IPR&D") represents the fair value of incomplete Aesynt research and development projects that had not reached technological feasibility as of the date of acquisition. Incremental costs incurred for those projects are expensed as incurred in research and development. The fair value of trade names, acquired developed technology, and acquired IPR&D was determined based on an income approach using the relief-from-royalty method at the royalty rates of 0.5%, 4% to 8% and 12.5%, respectively. The fair value of customer relationships, backlog, and non-compete intangible assets were determined based on an income approach using the discounted cash flow method, at the discounted rates of 13%, 10% and 13%, respectively. The intangible assets, except customer relationship and IPR&D, are being amortized over their estimated useful lives using the straight line method of amortization. The customer relationship intangible asset is being amortized using a double-declining method of amortization as such method better represents the economic benefits to be obtained. In accordance with authoritative guidance, the IPR&D is accounted for as an indefinite-lived intangible asset until completion or abandonment of the associated research and development efforts. IPR&D is tested for impairment during the period it is considered an indefinite lived asset. IPR&D related projects are expected to be completed in two to three years. As of September 30, 2016, none of the IPR&D projects have been completed, and they have progressed as previously estimated. The Company incurred approximately $9.3 million in acquisition-related costs related to the Aesynt acquisition of which $2.9 million and $6.4 million was recognized in three and nine months ended December 31, 2015 and September 30, 2016, respectively. These costs are included in selling, general and administrative expenses in the Company's Condensed Consolidated Statement of Operations. Revenues and losses from operations since the acquisition date through September 30, 2016 for Aesynt were $119.9 million and $(30.6) million, respectively. Losses from operations includes the amortization of intangible assets of $20.9 million for the period presented. Pro forma financial information for 2016 and 2015 acquisitions The following table presents certain unaudited pro forma information for illustrative purposes only, for the nine months ended September 30, 2016 and 2015 as if Aesynt had been acquired on January 1, 2015. The pro forma information is not indicative of what would have occurred had the acquisitions taken place on January 1, 2015. The unaudited pro forma information combines the historical results of the acquisitions with the Company's consolidated historical results and includes certain adjustments reflecting the estimated impact of fair value adjustments for the respective periods. The pro forma adjustments include the impact of fair value adjustment related to deferred revenue, inventory fair value adjustment, amortization of intangible assets, stock-based compensation expense, interest expense and amortization of deferred issuance cost, and certain classification to conform to Omnicell's accounting policies.
| Nine months ended September 30,
| 2016 |  | 2015
| (In thousands, except per share data)
Pro forma net revenues | $ | 520,648 |  | $ | 492,753 |
Pro forma net income | $ | 446 |  | $ | 2,485 |
Pro forma net income per share basic | $ | 0.01 |  | $ | 0.07 |
Pro forma net income per share diluted | $ | 0.01 |  | $ | 0.07 |

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
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