XML 23 R9.htm IDEA: XBRL DOCUMENT
v3.19.2

Business Acquisitions | 12 Months Ended
--- | ---
Jun. 30, 2019
Business Combinations [Abstract] |
Business Acquisitions |
2. | BUSINESS ACQUISITIONS
Counsyl 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 further 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 $405.9, consisting of $278.5 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. The working capital was finalized during the second quarter as described below. 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 significant assumptions used in the model to estimate the value of the intangible assets included projected cash flows, discount rates, net working capital and long-term growth rate. The initial allocation of the consideration transferred is based on a preliminary valuation and is subject to 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. During the year ended June 30, 2019, $1.1 of this escrow was returned to Myriad as a result of a working capital adjustment which reduced the total consideration and goodwill. There was also a reduction in the intangible assets of $2.9 due to updated assumptions related to contributory asset charges associated with the related acquired asset, a $1.9 decrease in the deferred tax liability, and a $0.7 reduction to equipment due to updated valuations. The offset for the intangible asset, deferred tax liability and equipment changes was a $4.4 increase in goodwill. The allocation of the consideration transferred will be finalized within the measurement period (up to one year from the acquisition date).
|  | Estimated Fair Value |
Current assets |  | $ | 42.5 |
Intangible assets |  |  | 290.0 |
Equipment |  |  | 18.2 |
Other assets |  |  | 0.1 |
Goodwill |  |  | 99.3 |
Current liabilities |  |  | (19.6 | )
Long term liabilities |  |  | (0.1 | )
Deferred tax liability |  |  | (9.2 | )
Total fair value purchase price |  | $ | 421.2 |
Less: Cash acquired |  |  | (15.3 | )
Total consideration transferred |  | $ | 405.9 |
Identifiable Intangible Assets The Company acquired intangible assets that consisted of developed screening processes, which had an estimated fair value of $290.0. 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 Company will amortize the intangible assets on a straight-line basis over their estimated useful lives of 12 years. Goodwill The 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. Changes in goodwill since the initial purchase as of June 30, 2019 are shown below:
|  | Carrying |
|  | amount |
Balance September 30, 2018 |  | $ | 94.9 |
Fair value adjustment to equipment |  |  | 0.7 |
Intangible adjustment |  |  | 2.9 |
Working capital adjustment |  |  | (1.1 | )
Change in deferred tax liability |  |  | 1.9 |
Ending balance June 30, 2019 |  | $ | 99.3 |
This goodwill is not deductible for income tax purposes. Pro Forma Information (Unaudited) 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 with the Company. 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.
|  | Years Ended |
|  | June 30, |
|  | 2019 |  |  | 2018 |
Revenue |  | $ | 861.3 |  |  | $ | 881.8 |
Income from operations |  |  | 17.9 |  |  |  | 74.3 |
Net income |  |  | 13.8 |  |  |  | 73.0 |
Net income per share, basic |  | $ | 0.19 |  |  | $ | 1.01 |
Net income per share, diluted |  | $ | 0.18 |  |  | $ | 0.98 |
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 year ended June 30, 2019, Counsyl contributed revenue of approximately $104.9. For the year ended June 30, 2019, operating expenses related to Counsyl were approximately $67.6

X
- 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
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration