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Acquisitions | 3 Months Ended
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Sep. 30, 2017
Business Combinations [Abstract] |
Acquisitions | Acquisitions POS Portal On July 31, 2017, the Company acquired all of the outstanding shares of POS Portal, Inc. ("POS Portal") a leading provider of payment devices and services primarily to the small and midsized ("SMB") market segment in the United States. POS Portal joined the Worldwide Barcode, Networking & Security segment. Under the purchase agreement, the all-cash transaction included an initial purchase price of approximately $144.9 million paid in cash at closing. The Company acquired $4.2 million in cash, net of debt payoff and other customary closing adjustments, resulting in $142.8 million net cash paid for POS Portal initially. The agreement includes a cash earn-out payment up to $13.2 million to be paid on November 30, 2017, based on POS Portal's earnings before interest expense, taxes, depreciation and amortization (EBITDA) for the trailing twelve months (TTM) ending September 30, 2017. A portion of the purchase price was placed into escrow to indemnify the Company for certain pre-acquisition damages. As of September 30, 2017, the balance available in escrow was $13.5 million. The preliminary purchase price of this acquisition was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction date. The goodwill balance is primarily attributed to expanding the Company's high-value capabilities and market reach across all payment channels. Goodwill, identifiable intangible assets and the related deferred tax liability are not deductible for tax purposes. The valuation of tangible assets, identifiable intangible assets and goodwill is still in process at the date of this filing, therefore, the preliminary purchase price allocation provided is subject to change. Pro forma results of operations have not been presented for the acquisition of POS Portal because such results are not material to our consolidated results.
| POS Portal
| (in thousands)
Receivables | $ | 8,914 |
Inventory | 8,352 |
Other current assets | 917 |
Property and equipment | 24,964 |
Goodwill | 100,231 |
Identifiable intangible assets | 57,000 |
Other non-current assets | 100 |
| $ | 200,478 |
Accounts payable | $ | 10,897 |
Accrued expenses and other current liabilities | 5,130 |
Contingent consideration | 13,098 |
Long-term deferred taxes payable | 102 |
Other long-term liabilities | 28,449 |
Consideration transferred, net of cash acquired | 142,802 |
| $ | 200,478 |
Intangible assets acquired include trade names, customer relationships, non-compete agreements and an encryption key library. The weighted-average amortization period for these identified intangible assets after purchase accounting adjustments, other than goodwill, was 10 years. Intelisys On August 29, 2016, the Company acquired substantially all the assets of Intelisys, a technology services company with voice, data, cable, wireless, and cloud services. Intelisys is part of the Company's Worldwide Communications and Services operating segment. With this acquisition, the Company broadens its capabilities in the telecom and cloud services market and generates the opportunity for high-growth recurring revenue. Under the asset purchase agreement, the Company made an initial cash payment of approximately $84.6 million, which consisted of an initial purchase price of $83.6 million and $1.0 million for additional net assets acquired at closing, and agreed to make four additional annual cash installments based on a form of adjusted EBITDA for the periods ending June 30, 2017 through June 30, 2020. The Company acquired $0.8 million of cash as part of the acquisition, resulting in $83.8 million net cash paid for Intelisys initially. A portion of the purchase price was placed into escrow to indemnify the Company for certain pre-acquisition damages. As of September 30, 2017, the balance available in escrow was $8.5 million. The purchase price of this acquisition was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction date. The goodwill balance is primarily attributed to entering the recurring revenue telecom and cloud services market and expanded market opportunities to grow recurring revenue streams. Goodwill and identifiable intangible assets are expected to be fully deductible for tax purposes.
| Intelisys
| (in thousands)
Receivables | $ | 21,655 |
Other current assets | 1,547 |
Property and equipment | 5,298 |
Goodwill | 109,005 |
Identifiable intangible assets | 63,110 |
Other non-current assets | 1,839 |
| $ | 202,454 |
Accounts payable | $ | 21,063 |
Accrued expenses and other current liabilities | 2,587 |
Contingent consideration | 95,000 |
Consideration transferred, net of cash acquired | 83,804 |
| $ | 202,454 |
Intangible assets acquired include trade names, customer relationships and non-compete agreements. The weighted-average amortization period for these identified intangible assets after purchase accounting adjustments, other than goodwill, was 10 years. Following the August 29, 2016 acquisition date, Intelisys contributed the following results to the Condensed Consolidated Income Statement for the quarters ended September 30, 2017 and 2016.
| Quarter ended September 30,
| 2017 |  | 2016
| (in thousands)
Net Sales | $ | 9,750 |  |  | $ | 2,863 |
Amortization of intangible assets | 1,676 |  |  | 530 |
Change in fair value of contingent consideration | 4,094 |  |  | 830 |
Operating loss | (1,579 | ) |  | (135 | )
Net loss | $ | (973 | ) |  | $ | (85 | )
The following table summarizes the Company's unaudited consolidated pro forma results of operations as though the Intelisys acquisition happened on July 1, 2016. The results do not necessarily reflect what the combined company's financial results would have been had the acquisition occurred on the date indicated. They also may not be useful in predicting the future financial results of the combined company. The actual results may differ significantly from the pro forma results reflected herein due to a variety of factors.
| Quarter ended September 30, 2016
| (in thousands, except per share data)
| As Reported, Consolidated |  | Pro forma, Consolidated(1)
Net Sales | $ | 932,566 |  |  | $ | 937,782 |
Operating income | 22,875 |  |  | 24,248 |
Net Income | 14,816 |  |  | 15,841 |
Earnings per share: |  |  |
Basic | $ | 0.58 |  |  | $ | 0.62 |
Diluted | $ | 0.58 |  |  | $ | 0.61 |
(1) Pro forma results include actual results for Intelisys for the two months ended August 31, 2016. On a gross basis, operating income included additional amortization expense of $1.1 million and additional depreciation expense of $0.2 million, partially offset by the add back of $0.4 million in acquisition costs. Net income, net of tax, includes additional amortization expense of $0.7 million, additional depreciation expense of $0.1 million, additional income tax expense of $0.8 million, partially offset by the add back of $0.4 million in acquisition costs. Acquisition costs are not tax effected as such costs are non-deductible for tax purposes.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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