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Mergers and Acquisitions | 12 Months Ended
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Dec. 31, 2016
Business Combinations [Abstract] |
Mergers and Acquisitions | Mergers and Acquisitions Oxitec Acquisition In September 2015, pursuant to a Stock Purchase Agreement (the "Oxitec Purchase Agreement"), the Company acquired 100% of the issued outstanding share capital of Oxitec. The aggregated consideration paid consisted of (i) 1,359,343 shares of the Company's common stock (the "Stock Consideration") and (ii) $90,199 in cash (the "Cash Consideration"), inclusive of net cash and working capital adjustments as defined in the Oxitec Purchase Agreement totaling $9,449. Stock Consideration totaling 480,422 shares and Cash Consideration totaling $1,991 were withheld as escrow at closing and are issuable and payable, respectively, eighteen months after closing, subject to reduction for satisfaction of any claims for indemnification made by the Company under the Oxitec Purchase Agreement. Cash Consideration withheld is included in deferred consideration as of December 31, 2016. The results of Oxitec's operations subsequent to the acquisition date have been included in the consolidated financial statements. The fair value of the total consideration transferred was $146,394. The acquisition date fair value of the Stock Consideration and Cash Consideration is presented below:
Cash | $ | 90,199 |
Common shares | 56,195 |
| $ | 146,394 |
The fair value of the shares of the Company common stock issued was based on the quoted closing price of the Company's common stock as of the closing date of the acquisition. The estimated fair value of assets acquired and liabilities assumed at the acquisition date is shown below:
Cash | $ | 3,780 |
Trade receivables | 125 |
Other receivables | 7,395 |
Prepaid expenses and other | 121 |
Property, plant, and equipment | 1,198 |
Intangible assets | 96,854 |
Total assets acquired | 109,473 |
Accounts payable | 1,187 |
Accrued compensation and benefits | 246 |
Other accrued liabilities | 210 |
Deferred revenue | 120 |
Deferred tax liabilities | 12,584 |
Total liabilities assumed | 14,347 |
Net assets acquired | 95,126 |
Goodwill | 51,268 |
Total consideration | $ | 146,394 |
The acquired intangible assets primarily include in-process research and development, the fair value of which was determined using the multi-period excess earning method, which is a variation of the income approach that converts future cash flows to single discounted present value amounts. In November 2016, the Company re-evaluated certain of the acquired in-process research and development technology and determined it was placed in service as developed technology and began amortizing the original amount capitalized using a useful life of eighteen years. Goodwill, which is not deductible for tax purposes, represents the assembled workforce and the potential for future Oxitec products and technologies. The Company incurred $1,675 of acquisition related costs, which is included in selling, general and administrative expenses in the accompanying consolidated statement of operations for the year ended December 31, 2015. Okanagan Acquisition In April 2015, pursuant to a Stock Purchase Agreement (the "Okanagan Purchase Agreement"), the Company acquired 100% of the outstanding shares of Okanagan. Pursuant to the Okanagan Purchase Agreement, the former shareholders of Okanagan received an aggregate of 707,853 shares of the Company's common stock and $10,000 cash in exchange for all shares in Okanagan. The results of Okanagan's operations subsequent to the acquisition date have been included in the consolidated financial statements. The fair value of the total consideration transferred was $40,933. The acquisition date fair value of each class of consideration transferred is presented below:
Cash | $ | 10,000 |
Common shares | 30,933 |
| $ | 40,933 |
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 closing date of the acquisition. The estimated fair value of assets acquired and liabilities assumed at the acquisition date is shown below:
Cash | $ | 58 |
Trade receivables | 16 |
Other receivables | 49 |
Property, plant, and equipment | 32 |
Intangible assets | 36,500 |
Total assets acquired | 36,655 |
Accounts payable | 181 |
Deferred revenue | 181 |
Deferred tax liabilities | 8,847 |
Total liabilities assumed | 9,209 |
Net assets acquired | 27,446 |
Goodwill | 13,487 |
Total consideration | $ | 40,933 |
The acquired intangible assets primarily include developed technology, patents and know-how and the fair values of the acquired assets were determined using the with-and-without method, which is a variation of the income approach that utilizes estimated cash flows with all assets in place at the valuation date and estimated cash flows with all assets in place except the intangible assets at the valuation date. The intangible assets are being amortized over a useful life of fourteen years. Goodwill, which is not deductible for tax purposes, represents potential future applications of Okanagan's technology to other fruits, including additional apple varietals, and anticipated buyer-specific synergies arising from the combination of the Company's and Okanagan's technologies. The Company incurred $341 of acquisition-related costs, of which $267 and $74 is included in selling, general and administrative expenses in the accompanying consolidated statements of operations for the years ended December 31, 2015 and 2014, respectively. ActoGeniX Acquisition In February 2015, the Company acquired 100% of the membership interests of ActoGeniX NV ("ActoGeniX"), a European biopharmaceutical company, pursuant to a Stock Purchase Agreement (the "ActoGeniX Purchase Agreement"). ActoGeniX's platform technology complements the Company's suite of proprietary 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 closing date of the acquisition. The 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 non-current assets | 23 |
Total assets acquired | 71,848 |
Accounts payable | 230 |
Accrued compensation and benefits | 196 |
Other accrued liabilities | 253 |
Deferred revenue | 732 |
Deferred tax liabilities | 612 |
Total liabilities assumed | 2,023 |
Net assets acquired | 69,825 |
Goodwill | 2,649 |
Total consideration | $ | 72,474 |
The acquired intangible assets primarily include in-process research and development, the fair value of which was 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. In August 2015, the Company re-evaluated the acquired in-process research and development technology and determined that it was placed in service as developed technology and began amortizing the original amount capitalized using a useful life of eighteen years. Goodwill, which is not 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. The Company incurred $418 of acquisition-related costs, of which $381 and $37 is included in selling, general and administrative expenses in the accompanying consolidated statements of operations for the years ended December 31, 2015 and 2014, respectively. 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 "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 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 are entitled to receive deferred cash consideration valued at $20,115 in exchange for all membership interests of Trans Ova. The first two installments of the deferred cash consideration were paid in August 2015 and 2016, respectively, and the remaining payment is due in August 2017. The 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 $78,143, $83,912, and $26,352, and net income (loss) of $(9,679), $(1,531), and $2 for the years ended December 31, 2016, 2015, and 2014, respectively. 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 closing 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 non-current 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 that convert future cash flows to single discounted present value amounts. The acquired intangible assets are being amortized over useful lives ranging from three to nine years. Goodwill, which is 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. As a result of a 2012 transaction between Trans Ova and its wholly owned subsidiary, ViaGen, the Company may be obligated to make certain future contingent payments to the former equity holders of ViaGen, up to a total of $3,000 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 acquisition-related costs, which is included in selling, general, and administrative expenses in the accompanying consolidated statement of operations for the year ended December 31, 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 the Company's 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 the Company's 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 closing date of 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 liabilities | 50 |
Total liabilities assumed | 761 |
Net assets acquired | 4,071 |
Goodwill | 20,924 |
Total consideration | $ | 24,995 |
The acquired intangible assets consist of in-process research and development, the fair value of which was determined using the cost approach. In November 2016, the Company re-evaluated the acquired in-process research and development technology and determined it was placed in service as developed technology and began amortizing the original amount capitalized using a useful life of ten years. Goodwill, which is not deductible for tax purposes, consists of buyer-specific synergies between the Company's and Medistem's technologies. The Company incurred $680 of acquisition related costs, of which $310 is included in selling, general and administrative expenses in the accompanying consolidated statement of operations for the year ended December 31, 2014. Unaudited Condensed Pro Forma Financial Information The results of operations of the 2015 acquisitions discussed above are included in the consolidated statements of operations beginning on the day after their respective acquisition dates. The following unaudited condensed pro forma financial information for the years ended December 31, 2015 and 2014, is presented as if the 2015 acquisitions had been consummated on January 1, 2014:
| Year Ended December 31,
| 2015 |  | 2014
| Pro Forma
Revenues | $ | 174,558 |  |  | $ | 73,240 |
Loss before income taxes | (99,751 | ) |  | (105,085 | )
Net loss | (99,594 | ) |  | (104,577 | )
Net loss attributable to the noncontrolling interests | 3,501 |  |  | 3,794 |
Net loss attributable to Intrexon | (96,093 | ) |  | (100,783 | )
The results of operations of the 2014 acquisitions discussed above are included in the consolidated statements of operations beginning on the day after their respective acquisition dates. The following unaudited condensed pro forma financial information for the year ended December 31, 2014 is presented as if the 2014 acquisitions had been consummated on January 1, 2013:
| Year Ended December 31, 2014
| Pro Forma
Revenues | $ | 119,721 |
Loss before income taxes | (82,041 | )
Net loss | (81,938 | )
Net loss attributable to the noncontrolling interests | 4,159 |
Net loss attributable to Intrexon | (77,779 | )

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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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