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Note 2. Acquisitions (Notes)
 3 Months Ended
Sep. 30, 2016
Business Combinations [Abstract]  
Business Combination Disclosure
Acquisitions
On July 18, 2016, the Company acquired certain assets and assumed certain liabilities of Aircom Manufacturing, Inc. (“Aircom”), located in Indianapolis, Indiana, for consideration of $3.5 million, which consisted of $2.5 million in cash payments and the settlement of a $1.0 million receivable. This acquisition was accounted for as a business combination and includes assets acquired of $6.4 million and liabilities assumed of $1.4 million based on their estimated fair values as of the acquisition date. Operating results are included in the Company’s condensed consolidated financial statements beginning on July 18, 2016 and had an immaterial effect on the Company’s financial results for the period ending September 30, 2016. Direct costs of the acquisition were not material.
Consideration paid for Aircom was less than the estimated fair values of the assets acquired and liabilities assumed, which resulted in a bargain purchase gain of $0.9 million and was recorded in the Non-operating income (expense), net line item on the Condensed Consolidated Statements of Income. For tax purposes, the bargain purchase gain resulted in the reduction of the tax basis in Property and Equipment, resulting in a deferred tax liability of $0.6 million recorded on the opening balance sheet. This deferred tax liability reduced the bargain purchase gain, and the bargain purchase gain is not taxable.
The Company reassessed the recognition and measurement of identifiable assets acquired and liabilities assumed and concluded that all assets and liabilities were recognized and the valuation procedures and resulting estimates of fair values were appropriate. The Company is in the process of finalizing the fair value amounts of certain assets acquired and liabilities assumed, therefore, the gain may be subject to future adjustments. The bargain purchase gain resulted from the financial distress of Aircom as they were unable to secure sufficient capital to continue operations and service their existing debt.
Aircom was the former parent of Medivative Technologies, LLC, from which the Company acquired certain assets and assumed certain liabilities on May 2, 2016 (the “Medivative acquisition”). Aircom provided component parts and services to the Company subsequent to the Medivative acquisition. The Aircom acquisition is expected to add expertise in the manufacturing of precision metals and plastics to the Company’s package of value.
The Company is still in the process of finalizing fair value amounts for certain assets acquired and liabilities assumed for the Medivative acquisition. For further information regarding the Medivative acquisition, refer to our Annual Report on Form 10-K for the year ended June 30, 2016.