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Mergers and Acquisitions | 3 Months Ended
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Mar. 31, 2015
Business Combinations [Abstract] |
Mergers and Acquisitions | Mergers and Acquisitions ActoGeniX Acquisition In February 2015, the Company acquired 100% of the membership interests of ActoGeniX NV ("ActoGeniX"), a European clinical stage biopharmaceutical company, pursuant to a Stock Purchase Agreement (the "ActoGeniX Purchase Agreement"). ActoGeniX's platform technology complements our broad collection of technologies available for current and future collaborators. Pursuant to the ActoGeniX Purchase Agreement, the former members of ActoGeniX received an aggregate of 965,377 shares of the Company's common stock and $32,739 in cash in exchange for all membership interests of ActoGeniX. The results of ActoGeniX's operations subsequent to the acquisition date have been included in the consolidated financial statements. The fair value of the total consideration transferred was $72,474. The acquisition date fair value of each class of consideration transferred is presented below:
Cash | $ | 32,739 |
Common shares | 39,735 |
| $ | 72,474 |
The fair value of the shares of the Company's common stock issued was based on the quoted closing price of the Company's common stock as of the date of the acquisition. The preliminary estimated fair value of assets acquired and liabilities assumed at the acquisition date is shown below:
Cash | $ | 3,180 |
Other receivables | 305 |
Prepaid expenses and other | 31 |
Property, plant and equipment | 209 |
Intangible assets | 68,100 |
Other assets | 23 |
Total assets acquired | 71,848 |
Accounts payable | 230 |
Accrued compensation and benefits | 624 |
Other accrued liabilities | 307 |
Deferred revenue | 732 |
Deferred tax liability | 612 |
Total liabilities assumed | 2,505 |
Net assets acquired | 69,343 |
Goodwill | 3,131 |
Total consideration | $ | 72,474 |
The fair value of assets acquired and liabilities assumed at the acquisition date are based on preliminary valuations and the estimates and assumptions are subject to change as the Company obtains additional information during the measurement period which may be up to one year from the acquisition date. The acquired intangible assets primarily include in-process research and development, and the fair values of the acquired assets were determined using the multi-period excess earnings and with-and-without methods, which are both variations of the income approach that convert future cash flows to single discounted present value amounts. The in-process research and development is currently an indefinite-lived intangible asset. Goodwill, which is not expected to be deductible for tax purposes, represents the assembled workforce and anticipated buyer-specific synergies arising from the combination of the Company's and ActoGeniX's technologies. As of March 31, 2015, the Company had incurred $446 of acquisition related costs, of which $409 is included in selling, general and administrative expenses in the accompanying consolidated statement of income for the three months ended March 31, 2015. Trans Ova Acquisition In August 2014, the Company acquired 100% of the membership interests of Trans Ova, a provider of bovine reproductive technologies, pursuant to an Amended and Restated Membership Interest Purchase Agreement (the "Trans Ova Purchase Agreement"). The Company and Trans Ova intend to build upon Trans Ova's current platform with new capabilities with a goal of achieving higher levels of delivered value to dairy and beef cattle producers. Pursuant to the Trans Ova Purchase Agreement, the former members of Trans Ova received an aggregate of 1,444,388 shares of the Company's common stock and $63,625 in cash, and will receive deferred cash consideration valued at $20,115 in exchange for all membership interests of Trans Ova. The deferred cash consideration is payable in three equal installments upon the first, second, and third anniversaries of the transaction date. The Trans Ova Purchase Agreement also provides for payment to the former members of Trans Ova a portion of certain cash proceeds in the event there is an award under certain litigation matters pending as of the transaction date to which Trans Ova is a party. The results of Trans Ova's operations subsequent to the acquisition date have been included in the consolidated financial statements, including revenues of $18,926 and net loss of $237 for the three months ended March 31, 2015. The fair value of the total consideration transferred, including the noncontrolling interest in a majority-owned subsidiary of Trans Ova, was $127,875. The acquisition date fair value of each class of consideration transferred and noncontrolling interest is presented below:
Cash | $ | 63,625 |
Common shares | 32,802 |
Deferred cash consideration | 20,115 |
Total consideration transferred | 116,542 |
Fair value of noncontrolling interest | 11,333 |
Total | $ | 127,875 |
The fair value of the shares of the Company's common stock issued was based on the quoted closing price of the Company's common stock as of the date of the acquisition. The estimated fair value of assets acquired and liabilities assumed at the acquisition date is shown in the table below.
Cash | $ | 960 |
Trade receivables | 18,693 |
Related party receivables | 1,219 |
Inventory | 18,476 |
Prepaid expenses and other | 590 |
Property, plant and equipment | 21,164 |
Intangible assets | 23,700 |
Other assets | 147 |
Total assets acquired | 84,949 |
Accounts payable | 3,317 |
Accrued compensation and benefits | 913 |
Other accrued liabilities | 271 |
Deferred revenue | 4,458 |
Lines of credit | 4,091 |
Related party payables | 1,246 |
Long term debt | 9,090 |
Total liabilities assumed | 23,386 |
Net assets acquired | 61,563 |
Goodwill | 66,312 |
Total consideration and fair value of noncontrolling interest | $ | 127,875 |
The fair value of acquired inventory was determined using the cost approach, which establishes value based on the cost of reproducing or replacing the asset. The fair value of acquired property, plant and equipment was determined using the cost approach and the market approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets. The acquired intangible assets include various developed technologies and know-how, customer relationships, and trademarks, and the fair values of these assets were determined using the relief-from-royalty, multi-period excess earnings, and with-and-without methods, which are all variations of the income approach. The acquired intangible assets are being amortized over useful lives ranging from three to nine years. Goodwill, which will be deductible for tax purposes, represents the assembled workforce, potential future expansion of Trans Ova business lines and anticipated buyer-specific synergies arising from the combination of the Company's and Trans Ova's technologies. In conjunction with a prior transaction associated with Trans Ova's subsidiary, ViaGen, in September 2012, the Company may be obligated to make certain future contingent payments to the former equity holders of ViaGen, up to a total of $6,000 if certain revenue targets, as defined in the share purchase agreement, are met. The Company does not expect these revenue targets to be met and accordingly has assigned no value to this liability. The Company incurred $713 of costs primarily for legal and due diligence services related to this acquisition, which were all recorded in 2014. In February 2015, the Company acquired, through an exchange offer, the remaining outstanding membership interests of Trans Ova's majority-owned subsidiary, Exemplar, for $1,566 in cash and 307,074 shares of Company common stock. Medistem Acquisition In March 2014, the Company acquired 100% of the outstanding common stock and securities convertible into common stock of Medistem, Inc. ("Medistem"), an entity engaged in the development of Endometrial Regenerative Cells ("ERCs"), for a combination of cash and Company common stock. The acquisition allows the Company to employ its synthetic biology platforms to engineer a diverse array of cell-based therapeutic candidates using Medistem's multipotent ERCs. Pursuant to the terms of the merger agreement, Medistem equity holders received 714,144 shares of the Company's common stock and $4,920 in cash in exchange for the outstanding Medistem common stock and securities convertible into common stock. Additionally, Medistem had issued the Company two promissory notes in the amount of $707, including accrued interest, both of which were settled upon closing of the merger. Certain members of Medistem's management surrendered a total of 17,695 shares of their merger consideration to reimburse the Company for required payroll tax withholdings. The results of Medistem's operations subsequent to the acquisition date have been included in the consolidated financial statements. The fair value of the total consideration transferred was $24,995. The acquisition date fair value of each class of consideration transferred is presented below:
Cash | $ | 4,920 |
Common shares | 19,368 |
Settlement of promissory notes | 707 |
| $ | 24,995 |
The fair value of the shares of the Company's common stock issued was based on the quoted closing price of the Company's common stock as of the date of the acquisition. The estimated fair value of assets acquired and liabilities assumed at the acquisition date is shown in the table below.
Cash | $ | 8 |
Intangible assets | 4,824 |
Total assets acquired | 4,832 |
Accounts payable | 644 |
Accrued compensation and benefits | 67 |
Other accrued expenses | 50 |
Total liabilities assumed | 761 |
Net assets acquired | 4,071 |
Goodwill | 20,924 |
Total consideration | $ | 24,995 |
The fair value of acquired intangible assets was determined using the cost approach. The acquired intangible assets consist of in-process research and development, which is an indefinite-lived intangible asset. The goodwill consists of buyer-specific synergies between the Company's and Medistem's technologies present. The goodwill is not expected to be deductible for tax purposes. The Company incurred $680 of acquisition related costs, all of which was recorded in 2014 and $291 is included in selling, general and administrative expenses in the accompanying consolidated statement of income for the three months ended March 31, 2014. Unaudited Condensed Pro Forma Financial Information The results of operations of the 2015 acquisition discussed above are included in the consolidated statements of income beginning on the day after the acquisition date. The following unaudited condensed pro forma financial information for the three months ended March 31, 2015 and 2014 is presented as if the acquisition had been consummated on January 1, 2014:
| Three Months Ended March 31,
| 2015 |  | 2014
| Pro forma
Revenues | $ | 33,927 |  |  | $ | 7,854 |
Income before income taxes | 23,282 |  |  | 1,582 |
Net Income | 22,487 |  |  | 1,276 |
Net loss attributable to the noncontrolling interests | 1,293 |  |  | 866 |
Net income attributable to Intrexon | 23,780 |  |  | 2,142 |
The results of operations of the 2014 acquisitions discussed above are included in the consolidated statements of income beginning on the day after their respective acquisition dates. The following unaudited condensed pro forma financial information for the three months ended March 31, 2014 is presented as if the acquisitions had been consummated on January 1, 2013:
| Three Months Ended March 31, 2014
| Pro forma
Revenues | $ | 22,211 |
Income before income taxes | 1,319 |
Net income | 1,013 |
Net income attributable to the noncontrolling interests | 976 |
Net income attributable to Intrexon | 1,989 |

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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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