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Acquisitions | 3 Months Ended
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Sep. 30, 2018
Business Combinations [Abstract] |
Acquisitions |
(3) | ACQUISITIONS
Acquisition of Counsyl, Inc. On July 31, 2018, the Company completed the acquisition of Counsyl, Inc. (“Counsyl”), a leading provider of genetic testing and DNA analysis services, pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated May 25, 2018. Pursuant to the terms of the Merger Agreement, Myriad Merger Sub, Inc., a newly-created wholly-owned subsidiary of the Company, was merged with and into Counsyl, with Counsyl continuing as the surviving corporation and a wholly-owned subsidiary of Myriad. The Company believes the acquisition allows for greater entry into the high-growth reproductive testing market, with the ability to become a leader in women’s health genetic testing. The Company acquired Counsyl for total consideration of $407.0, consisting of $279.6 in cash, financed in part by the Amendment to the Facility (see Note 8) and 2,994,251 shares of common stock issued, valued at $127.4. The shares were issued and valued as of July 31, 2018 at a per share market closing price of $42.53. Of the cash consideration, $5.0 was deposited into an escrow account to fund any post-closing adjustments payable to Myriad based upon differences between the estimated working capital and the actual working capital of Counsyl at closing. Consideration transferred was allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values as of the acquisition date. Management estimated the fair value of tangible and intangible assets and liabilities in accordance with the applicable accounting guidance for business combinations and utilized the services of third-party valuation consultants. The initial allocation of the consideration transferred is based on a preliminary valuation and is subject to potential adjustments. Balances subject to adjustment primarily include the valuations of acquired assets (tangible and intangible), liabilities assumed, as well as tax-related matters. During the measurement period, the Company may record adjustments to the provisional amounts recognized. The Company expects the allocation of the consideration transferred to be final within the measurement period (up to one year from the acquisition date).
|  | Estimated Fair Value |
Current assets |  | $ | 42.5 |
Intangible assets |  |  | 292.9 |
Equipment |  |  | 18.9 |
Other assets |  |  | 0.1 |
Goodwill |  |  | 94.9 |
Current liabilities |  |  | (19.6 | )
Long term liabilities |  |  | (0.1 | )
Deferred tax liability |  |  | (7.3 | )
Total fair value purchase price |  | $ | 422.3 |
Less: Cash acquired |  |  | (15.3 | )
Total consideration transferred |  | $ | 407.0 |
Identifiable Intangible Assets The Company acquired intangible assets that consisted of developed screening processes which had an estimated fair value of $292.0 and internally developed software with an estimated fair value of $0.9. The fair values of these developed screening processes and related useful lives were determined using a probability-weighted income approach that discounts expected future cash flows to present value. The estimated net cash flows were discounted using a discount rate of 12.5% which is based on the estimated internal rate of return for the acquisition and represents the rate that market participants might use to value the intangible assets. The fair value of the internally developed software was determined based on a replacement cost approach. The Company will amortize the intangible assets on a straight-line basis over their estimated useful lives of 12 years for the developed screening processes and 5 years for the internally developed software. Goodwill The $94.9 of goodwill represents the excess of consideration transferred over the fair value of assets acquired and liabilities assumed and is attributable to the benefits expected from combining the Company’s expertise with Counsyl’s technology, customer insights, and ability to effectively integrate genetic screening into clinical practice with OBGYNs. This goodwill is not deductible for income tax purposes. Pro Forma Information The unaudited pro-forma results presented below include the effects of the Counsyl acquisition as if it had been consummated as of July 1, 2017, with adjustments to give effect to pro forma events that are directly attributable to the acquisition, which includes adjustments related to the amortization of acquired intangible assets, interest income and expense, and depreciation. The unaudited pro forma results do not reflect any operating efficiency or potential cost savings that may result from the consolidation of Counsyl. Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operation of the combined company would have been if the acquisition had occurred at the beginning of the period presented nor are they indicative of future results of operations and are not necessarily indicative of results that might have been achieved had the acquisition been consummated as of July 1, 2017.
|  | Three months ended |
|  | September 30, |
|  | 2018 |  |  | 2017 |
Revenue |  | $ | 212.5 |  |  | $ | 209.5 |
Income from operations |  |  | 11.5 |  |  |  | 69.6 |
Net income |  |  | 8.6 |  |  |  | 61.3 |
Net income per share, basic |  | $ | 0.11 |  |  | $ | 0.86 |
Net income per share, diluted |  | $ | 0.11 |  |  | $ | 0.84 |
To complete the purchase transaction, we incurred approximately $6.8 of acquisition costs, which are recorded as selling, general and administrative expenses in the period incurred. For the three months ended September 30, 2018, Counsyl contributed revenue of approximately $19.4. For the three months ended September 30, 2018, operating expenses related to Counsyl were approximately $33.0.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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- References No definition available. + Details
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