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Acquisition
 3 Months Ended
Jun. 30, 2013
Acquisition  
Acquisition

Note 2 — Acquisition

 

On May 15, 2012, we completed a business combination (the “Bios Acquisition”) by acquiring specific assets and assuming certain liabilities of Bios International Corporation (“Bios”), a New Jersey corporation.  The asset acquisition agreement (the “Bios Agreement”) includes a provision for contingent consideration based on revenue growth over a three year earn-out period.  The Bios Acquisition further diversified and grew our Instruments segment.

 

The contingent consideration arrangement requires us to pay Bios if cumulative revenues related to the acquisition for the three years subsequent to the acquisition exceed $22,127,000.  The potential undiscounted future payment that we could be required to make ranges from $0 to $6,710,000.  The fair value of the contingent consideration arrangement included in the purchase price below was estimated based on the historic revenue growth rates of Bios.  Over the remaining term of the agreement, we are accreting through interest expense the difference between the estimated fair value of the contingent consideration, $2,140,000, and the amount we estimate we will pay, $2,240,000.

 

The Bios Acquisition constituted the acquisition of a business and was recognized at fair value.  We determined the estimated fair values using discounted cash flow analyses and estimates made by management.  The financial statements for the three months ended June 30, 2012, reflected our preliminary purchase price allocation, which was finalized in the second quarter of the year ended March 31, 2013.  The following reflects our allocation of the consideration in accordance with the Bios Agreement as of March 31, 2013 (in thousands):

 

Cash consideration

 

$

16,660

 

Contingent purchase price liability

 

2,140

 

Aggregate consideration

 

$

18,800

 

 

 

 

 

The purchase price was allocated as follows:

 

 

 

Accounts receivable, net

 

$

478

 

Inventories, net

 

910

 

Other current assets

 

28

 

Property, plant and equipment

 

63

 

Intangible assets

 

8,200

 

Goodwill

 

9,190

 

Current liabilities

 

(69

)

Total purchase price allocation

 

$

18,800