Acquisitions & Disposals

9 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

On May 31, 2023, the Company completed its acquisition of montratec GmbH ("montratec") for $115,721,000 including $7,576,000 in cash acquired, a $540,000 working capital settlement, and a contingent payment that becomes payable if a certain EBITDA level for the twelve-month period December 31, 2023 is achieved as set forth in the purchase agreement for montratec. As of December 31, 2023, the Company has estimated this contingent liability to be $18,355,000, a decrease of $6,738,000 from the June 30, 2023 quarter due to a refinement in the estimates used to value the liability at May 31, 2023. This liability has been established in the opening balance sheet for montratec. The Company initially financed the acquisition by borrowing $117,000,000 on its New Revolving Credit Facility, but later repaid the New Revolving Credit Facility by borrowing an additional $120,000,000. Utilizing the Accordion feature under the Company's existing Term Loan B, the Company borrowed $75,000,000 and another $45,000,000 was borrowed through a new credit agreement secured by its U.S. accounts receivable balances. Refer to Note 9 for additional details on the Company's debt agreements.

montratec is a leading automation solutions company that designs and develops intelligent automation and transport systems for interlinking industrial production and logistics processes. montratec product offerings complement the Company's previous acquisitions of both Dorner Mfg. Corp. ("Dorner") and Garvey Corporation ("Garvey"), and furthers the Company's shift to intelligent motion and serves as a platform to expand capabilities in advanced, higher technology automation solutions. As the Company determined that the acquisition is not material to its existing operations, certain disclosures, including pro forma financial information, have not been included. montratec results have been included in the Company's results of operations from the acquisition date and the Company incurred $113,000 and $3,208,000 of acquisition and deal related costs classified as part of General and administrative expenses in the three and nine months ended December 31, 2023.

The purchase price has been preliminarily allocated to the assets acquired and liabilities assumed as of the date of acquisition. The excess consideration of $78,943,000 has been recorded as goodwill, a decrease of $6,414,000 from the amount preliminarily allocated to goodwill as of June 30, 2023 due to decreases of $6,738,000 for the Contingent liability, $577,000 related to a refinement in the calculation of deferred taxes within Other non current liabilities, and an increase of $108,000 in other assets as a result of refinements in estimates to calculate the right of use lease assets. Offsetting these were increases to goodwill as the result of the working capital settlement of $540,000, $260,000 relating to adjustments to working capital, and $209,000 within Property, plant, and equipment, net related to refined estimates for lease-related assets. The identifiable intangible assets acquired include customer relationships valued at $33,471,000, a tradename valued at $2,915,000, and technology valued at $16,196,000. The weighted average life of the acquired identifiable intangible assets subject to

amortization was estimated at 14 years at the time of acquisition. Of the $78,943,000 goodwill recorded from the acquisition, $7,531,000 is deductible for tax purposes.

The preliminary assignment of purchase consideration to the assets acquired and liabilities assumed is as follows (in thousands):


Cash	$	7,576
Working capital	4,896
Property, plant, and equipment, net	2,157
Intangible assets	52,581
Contingent liability (see above)	(18,355)
Other assets	5,704
Other non current liabilities	(17,781)
Goodwill	78,943
Total	$	115,721