Business Combinations Business Combinations Disclosure (Notes)

9 Months Ended

Sep. 30, 2019

Business Combination Disclosure [Text Block]

NOTE 19 – Business Acquisitions

On July 31, 2019, we acquired 100% of the outstanding shares of Quality Thermistor, Inc. (QTI) for $75 million plus a contingent earn out of up to $5 million based on sales performance objectives. The purchase price includes adjustments for debt assumed and changes in working capital. QTI, doing business as QTI Sensing Solutions, is a leading designer and manufacturer of high-quality temperature sensors serving original equipment manufacturers with mission-critical applications in the industrial, aerospace, defense and medical markets. This acquisition provides us with a new core temperature sensing technology that expands our sensing product portfolio, while increasing our presence in the industrial and medical markets.

The purchase price of $75,755 has been allocated to the fair values of assets and liabilities acquired as of July 31, 2019. The allocation of purchase price is preliminary pending the completion of the appraisals of property, plant, and equipment, the valuation of intangible assets, and finalization of management's estimates. The final purchase price allocation may result in a materially different allocation than that recorded as of September 30, 2019.

The following table summarizes the consideration paid and the preliminary fair values of the assets acquired and the liabilities assumed at the date of acquisition:



	Consideration Paid
Cash paid, net of cash acquired of $567	$	73,588
Contingent consideration	2,167
Purchase price	$	75,755


	Preliminary Fair Values at July 31, 2019
Current assets	$	7,212
Property, plant and equipment	2,502
Other assets	29
Goodwill	37,085
Intangible assets	31,700
Fair value of assets acquired	78,528
Less fair value of liabilities acquired	(2,773		)
Purchase price	$	75,755

Goodwill represents value the Company expects to be created by combining the operations of the acquired business with the Company's operations, including the expansion of customer relationships within our existing business, access to new customers, and potential cost savings and synergies. Goodwill related to the acquisition is expected to be deductible for tax purposes.

Contingent consideration is payable in cash upon the achievement of a revenue performance target for the year ending December 31, 2019. The Company recorded $2,167 as the acquisition date fair value of the contingent consideration based on an estimate of the probability of achieving the performance target using the most recent revenue forecast. This amount is reflected as an addition to purchase price and will be finalized once the full year 2019 results are known.

The following table summarizes the preliminary carrying amounts and weighted average lives of the acquired intangible assets:



	Carrying Value		Weighted Average Amortization Period
Customer lists/relationships	$	29,900	15.0
Technology and other intangibles	1,800		5.0
Total	$	31,700

Results of operations for QTI are included in our consolidated condensed financial statements beginning on July 31, 2019. The amount of net sales and net loss from QTI since the acquisition date that have been included in the condensed consolidated statements of earnings are as follows:



	For the period July 31, 2019 through September 30, 2019
Net sales	$	3,670
Net loss	$	(1,086	)