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Business Acquisitions | 6 Months Ended
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Jun. 30, 2023
Business Combinations [Abstract] |
Business Acquisitions | NOTE 3 – Business Acquisitions TEWA Temperature Sensors SP. Zo.o. Acquisition On February 28, 2022, we acquired 100% of the outstanding shares of TEWA Temperature Sensors SP. Zo.o. (“TEWA”). TEWA is a designer and manufacturer of high-quality temperature sensors. TEWA has complementary capabilities with our existing temperature sensing platform, and the acquisition supports our end market diversification strategy and expands our presence in Europe. The final purchase price of $23,721, net of cash acquired of $2,979, has been allocated to the fair values of assets and liabilities acquired as of February 28, 2022. The purchase price was reduced by $794 for the final settlement of net working capital during the first quarter of 2023. The following table summarizes the consideration paid, the fair values of the assets acquired, and the liabilities assumed as of the date of acquisition:
|  | Fair Values at February 28, 2022 |
Accounts receivable |  | $ | 2,521 |
Inventory |  |  | 3,136 |
Other current assets |  |  | 69 |
Property, plant and equipment |  |  | 654 |
Other assets |  |  | 27 |
Goodwill |  |  | 8,473 |
Intangible assets |  |  | 13,650 |
Fair value of assets acquired |  |  | 28,530 |
Less fair value of liabilities acquired |  |  | (4,809 | )
Purchase price |  | $ | 23,721 |
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, access to new customers, and potential cost savings and synergies. Goodwill related to the acquisition is expected to be deductible for tax purposes. The Company recorded a $1,180 step-up of inventory to its fair value as of the acquisition date. The step-up was amortized as a non-cash charge to cost of goods sold as the acquired inventory was sold with the full $1,180 recognized in the first half of 2022. The following table summarizes the carrying amounts and weighted average lives of the acquired intangible assets:
|  | Carrying Value |  |  | Weighted Average Amortization Period |
Customer lists/relationships |  | $ | 13,000 |  |  |  | 12.0 |
Technology and other intangibles |  |  | 650 |  |  |  | 3.0 |
Total |  | $ | 13,650 |  |  |  |
Ferroperm Piezoceramics A/S Acquisition On June 30, 2022, we acquired 100% of the outstanding shares of Ferroperm Piezoceramics A/S (“Ferroperm”). Ferroperm specializes in the design and manufacture of high performance piezoceramic components for use in complex and demanding medical, industrial, and aerospace applications. Ferroperm has complementary capabilities with our existing medical diagnostics and imaging product lines. The acquisition supports our end market diversification strategy and expands our presence in European end markets. The final purchase price of $72,340, net of cash acquired of $5,578, has been allocated to the fair values of assets and liabilities acquired as of June 30, 2022. The valuation of intangible assets and associated deferred tax liability was finalized in the first quarter of 2023. The following table summarizes the final consideration paid, the fair values of the assets acquired, and the liabilities assumed as of the date of acquisition:
|  | Fair Values at June 30, 2023 |
Accounts receivable |  | $ | 3,073 |
Inventory |  |  | 6,848 |
Other current assets |  |  | 1,003 |
Property, plant and equipment |  |  | 3,953 |
Other assets |  |  | 158 |
Goodwill |  |  | 31,985 |
Intangible assets |  |  | 38,100 |
Fair value of assets acquired |  |  | 85,120 |
Less fair value of liabilities acquired |  |  | (12,780 | )
Purchase price |  | $ | 72,340 |
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, access to new customers, and potential cost savings and synergies. Goodwill related to the acquisition is expected to be deductible for tax purposes. The Company recorded a $3,012 step-up of inventory to its fair value as of the acquisition date based on the preliminary valuation. The step-up was amortized as a non-cash charge to cost of goods sold as the acquired inventory was sold in the third and fourth quarters of 2022. The following table summarizes the carrying amounts and weighted average lives of the acquired intangible assets:
|  | Carrying Value |  |  | Weighted Average Amortization Period |
Customer lists/relationships |  | $ | 31,800 |  |  |  | 16.0 |
Technology and other intangibles |  |  | 6,300 |  |  |  | 14.0 |
Total |  | $ | 38,100 |  |  |  |
Maglab AG Acquisition On February 6, 2023, we acquired 100% of the outstanding shares of Maglab AG ("Maglab"). Maglab has deep expertise in magnetic system design and current measurement solutions for use in e-mobility, industrial automation, and renewable energy applications. Maglab's domain expertise coupled with CTS’ commercial, technical and operational capabilities position us to advance our status as a recognized innovator in electric motor sensing and controls markets. The final purchase price of $7,717 has been allocated to the fair values of assets and liabilities acquired as of February 6, 2023. The purchase price was increased by $3 for the final settlement of net working capital in the quarter. The following table summarizes the final consideration paid, the fair values of the assets acquired, and the liabilities assumed as of the date of acquisition:
|  | Consideration Paid |
Cash paid, net of cash acquired of $14 |  | $ | 4,153 |
Contingent consideration |  |  | 3,564 |
Purchase price |  | $ | 7,717 |
|  | Fair Values at February 6, 2023 |
Accounts receivable |  | $ | 348 |
Inventory |  |  | 43 |
Other current assets |  |  | 41 |
Property, plant and equipment |  |  | 35 |
Goodwill |  |  | 4,997 |
Intangible assets |  |  | 2,860 |
Fair value of assets acquired |  |  | 8,324 |
Less fair value of liabilities acquired |  |  | (607 | )
Purchase price |  | $ | 7,717 |
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, access to new customers, and potential cost savings and synergies. Goodwill related to the acquisition is expected to be deductible for tax purposes. The following table summarizes the carrying amounts and weighted average lives of the acquired intangible assets:
|  | Carrying Value |  |  | Weighted Average Amortization Period |
Customer lists/relationships |  | $ | 2,800 |  |  |  | 13.0 |
Technology and other intangibles |  |  | 60 |  |  |  | 3.0 |
Total |  | $ | 2,860 |  |  |  |
All contingent consideration is payable in cash and is based on success factors related to the integration process as well as upon the achievement of annual revenue and customer order targets through the fiscal year ending December 31, 2025. The Company recorded $3,564 as the acquisition date fair value of the contingent consideration based on the estimate of the probability of achieving the performance targets. This amount is also reflected as an addition to the purchase price.

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