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Business Acquisitions | 3 Months Ended
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Mar. 31, 2017
Business Combinations [Abstract] |
Business Acquisitions | Business Acquisitions On January 5, 2016, the Company completed the acquisition of all of the membership interests of Aesynt pursuant to the Aesynt Securities Purchase Agreement. Aesynt is a provider of automated medication management systems, including 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 total consideration was $271.5 million, net of cash on hand at signing of $8.2 million. The results of Aesynt's operations have been included in our consolidated results of operations as of the time of the acquisition, and presented as part of the Automation & Analytics segment. On December 8, 2016, the Company completed its acquisition of ateb, Inc., and Ateb Canada Ltd. (together, “Ateb”) pursuant to Ateb's Securities Purchase Agreement for $40.7 million of cash consideration, net of $0.9 million cash acquired. The cash consideration, included the repayment of Ateb indebtedness and other adjustments provided for in the Ateb's Securities Purchase Agreement. Ateb is a provider of pharmacy-based patient care solutions and the medication synchronization solutions leader to independent and chain pharmacies. The results of Ateb's operations have been included in our consolidated results of operations as of the time of the acquisition, and presented as part of the Medication Adherence segment. The Company accounted for the acquisitions of Aesynt and Ateb 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 dates, respectively. The following table represents the allocation of the purchase price to the assets acquired and the liabilities assumed by the Company during each acquisition, respectively, reconciled to the purchase price transferred included in the Company's Consolidated Balance Sheet:
| Aesynt |  | Ateb (preliminary) |  | Total
| (in thousands)
Cash | $ | 8,164 |  |  | $ | 902 |  |  | $ | 9,066 |
Accounts receivable | 43,312 |  |  | 7,905 |  |  | 51,217 |
Inventory | 19,021 |  |  | 225 |  |  | 19,246 |
Other current assets | 3,787 |  |  | 1,239 |  |  | 5,026 |
Total current assets | 74,284 |  |  | 10,271 |  |  | 84,555 |
Property and equipment | 10,389 |  |  | 2,447 |  |  | 12,836 |
Intangibles | 123,700 |  |  | 12,500 |  |  | 136,200 |
Goodwill | 163,599 |  |  | 20,832 |  |  | 184,431 |
Other non-current assets | 968 |  |  | 1,009 |  |  | 1,977 |
Total assets | 372,940 |  |  | 47,059 |  |  | 419,999 |
Current liabilities | 26,753 |  |  | 2,314 |  |  | 29,067 |
Deferred revenue | 25,512 |  |  | 2,776 |  |  | 28,288 |
Non-current deferred tax liabilities | 38,622 |  |  | — |  |  | 38,622 |
Other non-current liabilities | 2,431 |  |  | 367 |  |  | 2,798 |
Total liabilities | 93,318 |  |  | 5,457 |  |  | 98,775 |
Total purchase price | $ | 279,622 |  |  | $ | 41,602 |  |  | $ | 321,224 |
Total purchase price, net of cash received | $ | 271,458 |  |  | $ | 40,700 |  |  | $ | 312,158 |
The $163.6 million of goodwill arising from the Aesynt acquisition is primarily attributed to sales of future products and services and Aesynt's assembled workforce. The goodwill has been assigned to the Automation & Analytics segment and is not deductible for tax purposes. The $20.8 million of goodwill arising from the Ateb acquisition is primarily attributed to sales of future products and services and Ateb's assembled workforce. Intangibles eligible for recognition separate from goodwill were those that satisfied either the contractual/legal criterion or the separability criterion in the accounting guidance. The identifiable intangible assets acquired and their estimated useful lives for amortization are as follows:
| Aesynt |  | Ateb
| Fair value |  | Weighted average useful life |  | Fair value |  | Weighted average useful life
| (In thousands) |  | (In years) |  | (In thousands) |  | (In years)
Customer relationships | $ | 58,200 |  |  | 14-16 |  | $ | 8,900 |  |  | 12
Developed technology | 38,800 |  |  | 8 |  | 3,400 |  |  | 5
Backlog | 20,200 |  |  | 1-3 |  | — |  | —
In-process research and development (1) | 3,900 |  |  | — |  | — |  | —
Non-compete | 1,800 |  |  | 3 |  | 100 |  |  | 1
Trade names | 800 |  |  | 1 |  | 100 |  |  | 1
Total purchased intangible assets | $ | 123,700 |  |  |  |  | $ | 12,500 |  |  |
(1) The amortization of the in-process R&D assets begins when the in-process R&D projects are complete. Aesynt Acquisition 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 March 31, 2017, none of the IPR&D projects have been completed, and they have progressed as previously estimated. Ateb Acquisition Customer relationships represent the fair value of the underlying relationships and agreements with Ateb’s customers expected to result in future sales, acquired developed technology represents the fair value of Ateb intellectual property incorporated in their products, non-compete intangible asset represents the fair value of non-compete agreements with former key members of Ateb's management, and trade name represents the fair value of brand and name recognition associated with the marketing of Ateb’s products and services. The fair value of Ateb trade names and acquired developed technology was determined based on an income approach using the relief-from-royalty method at the royalty rates of 0.5% and 5% to 6%, respectively. The fair value of customer relationships, and non-compete intangible assets were determined based on an income approach using the discounted cash flow method, both using a 15% discount rate. The intangible assets for non-compete agreements and trade name are being amortized over their estimated useful lives using the straight line method of amortization. The intangible assets for customer relationship and developed technology are being amortized using a double-declining method of amortization as such method better represents the economic benefits to be obtained.

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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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