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Acquisitions
 12 Months Ended
Mar. 31, 2012
Acquisitions  
Acquisitions

2.  Acquisitions

 

On April, 27, 2010, we purchased SGM Biotech, Inc. located in Bozeman, MT. Under the terms of this acquisition we acquired all of the stock of SGM Biotech for $11,722,000. A cash payment of $11,122,000 was made at closing with an additional $600,000 placed into a joint escrow account. The escrow was paid to the sellers in $200,000 increments at three months, six months and one year following closing. The purchase price was subject to a final working capital adjustment of $361,000 as defined in the Stock Purchase Agreement and was subsequently paid in October 2010. After the completion of the acquisition, we repaid $278,000 of loans owed to the shareholders of SGM Biotech. We incurred approximately $168,000 in third party acquisition costs related to this transaction. On April 30, 2010, we also completed the acquisition of the facility that houses the SGM Biotech, Inc. operations for $2,150,000 from Surreal, LLC.  Surreal, LLC was owned by the former owners of SGM Biotech, Inc., who became employees of the Company when SGM Biotech was acquired.

 

We will not be able to deduct the step up from cost to fair value for the assets acquired for tax purposes and therefore have recorded a deferred tax liability and additional goodwill of $2,358,000 as of the acquisition date.

 

The purchase price was allocated to the assets and liabilities acquired based on their estimated fair value at the acquisition date, subject to a final working capital adjustment. Intangible assets were valued using the income approach.  The purchase price allocation was as follows:

 

(Dollars in thousands)

 

 

 

Accounts Receivable

 

$

1,116

 

Inventory

 

758

 

Other Assets

 

195

 

Property and Equipment

 

1,035

 

Liabilities

 

(1,021

)

Deferred tax liability

 

(2,358

)

Customer Relationships

 

3,739

 

Non-compete Agreements

 

104

 

Trade Names

 

1,195

 

Intellectual Property

 

396

 

Goodwill

 

6,924

 

 

 

$

12,083

 

 

On December 21, 2010, we purchased the assets associated with the biological indicator line of products of Apex Laboratories, Inc. The products acquired include their biological indicators for use in vapor hydrogen peroxide disinfection processes. The purchase price consisted of a $5,890,000 cash payment at closing and a $600,000 holdback amount. The holdback amount accrues interest at two percent per annum.  In accordance with the asset purchase agreement, the holdback was adjusted and settled for $562,000 during the year ended March 31, 2012.

 

The purchase price was allocated to the assets acquired based on their estimated fair value at the acquisition date. Intangible assets were valued using the income approach. The purchase price allocation was as follows:

 

(Dollars in thousands)

 

 

 

Inventory

 

$

65

 

Accounts Receivable

 

544

 

Property and Equipment

 

49

 

Goodwill

 

1,261

 

Intellectual Property

 

3,483

 

Customer Relationships

 

810

 

Trade Names

 

278

 

 

 

$

6,490