Note

Acquisition

and Dispositions

Acquisitions

For the years ended

March 31, 2018

and

2017,

our acquisitions of businesses (net of cash acquired) totaled

$15,518,000

and

$8,622,000,

respectively, of which

none

were individually material in nature (see Item

Management’s Discussion and Analysis of Financial Condition and Results of Operations

For the year ended

March 31, 2016,

our acquisitions of businesses (net of cash acquired) totaled

$33,382,000,

which consisted primarily of the following material acquisitions:

Infitrak

July 6, 2015,

we completed a business combination (the “Infitrak Acquisition”) whereby we acquired all of the common stock of

2396081

Ontario Inc. and its wholly owned operating subsidiary, Infitrak Inc. (collectively “Infitrak”), a company whose business provides consulting, packaging and measuring solutions for cold chain applications. The stock purchase agreement (the “Infitrak Agreement”) includes provisions for both contingent consideration based upon the

two

- year growth in gross profit (as defined in the Earn-Out Agreement) of the packaging component of our cold chain business subsequent to the acquisition and for a holdback payment (subject to a post-closing adjustment), payable at the

one

year anniversary of the closing date.

Under the terms of the Infitrak Agreement, we were required to pay contingent consideration if the gross profit (as defined in the Infitrak Earn-Out Agreement) for our cold chain packaging business for the

two

years subsequent to the acquisition met certain levels. The potential undiscounted consideration payable ranged from

$15,000,000

CDN and was based upon a sliding scale of growth in gross profit (as defined in the Infitrak Earn-Out Agreement) for year

one

and year

two

percent and

percent, respectively. Based upon both historical and projected growth rates, we recorded

$9,271,000

of contingent consideration payable which represented our best estimate of the then current fair value of the amount that would ultimately be paid. Any changes to the contingent consideration ultimately paid would have resulted in additional income or expense in our consolidated statements of income.

July 2016,

we made the

first

Earn-Out payment in the amount of

$6,000,000

CDN (

$4,594,000

). In

March 2017,

we agreed to settle the remaining earn-out obligation (which was originally due in the

second

quarter of our year ending

March 31, 2018)

early by making a payment of

$6,000,000

CDN (

$4,558,000

We expected to achieve savings and generate growth as we integrated the Infitrak operations and sales and marketing functions. These factors, among others, contributed to a purchase price in excess of the estimated fair value of the net identifiable assets acquired and, as a result, we recorded goodwill in connection with this transaction. The goodwill is

not

deductible for tax purposes and it was assigned to our Cold Chain Packaging segment.

The Infitrak 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 following reflected our allocation of the consideration, subject to customary purchase price adjustments in accordance with the Infitrak Agreement (in thousands):

Cash consideration	$	8,747
Holdback payment liability		637
Contingent consideration liability		9,271
Aggregate consideration	$	18,655

Accounts receivable	$	925
Inventories		310
Property, plant and equipment		530
Intangibles		5,869
Goodwill		13,833
Accounts payable		(470	)
Accrued liabilities		(767	)
Deferred income taxes		(1,575	)
Total purchase price allocation	$	18,655

The accompanying consolidated statements of operations include the results of the Infitrak Acquisition from the acquisition date of

July 6, 2015.

The pro forma effects of the acquisition on the results of operations as if the acquisition had been completed on

April 1, 2015

and

2014,

are as follows (in thousands, except per share data):

	Year Ended March 31,
	201 6		201 5
Revenues	$	86,499	$	74,379
Net income		11,471		9,944
Net Income per common share:
Basic	$	3.18	$	2.82
Diluted		3.05		2.72

North Bay

August 6, 2015,

we completed a business combination (the “North Bay Acquisition”) whereby we acquired substantially all of the assets (other than certain fixed assets) and certain liabilities of the dental sterilizer testing business of North Bay Bioscience, LLC (“North Bay”). The asset purchase agreement (the “North Bay Agreement”) included a provision for a holdback payment (subject to a post-closing adjustment), payable at the

one

year anniversary of the closing date.

We expected to achieve savings and generate growth as we integrated the North Bay operations and sales and marketing functions. These factors, among others, contributed to a purchase price in excess of the estimated fair value of the net identifiable assets acquired and, as a result, we recorded goodwill in connection with this transaction. The goodwill is deductible for tax purposes and it was assigned to our Biological Indicators segment.

The North Bay 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 following reflected our allocation of the consideration, subject to customary purchase price adjustments in accordance with the North Bay Agreement (in thousands):

Cash consideration	$	10,322
Holdback payment liability		1,000
Aggregate consideration	$	11,322

Cash	$	20
Accounts receivable		285
Inventories		85
Property, plant and equipment		229
Intangibles		4,454
Goodwill		7,962
Accrued liabilities		(100	)
Unearned revenues		(1,613	)
Total purchase price allocation	$	11,322

The accompanying consolidated statements of operations include the results of the North Bay Acquisition from the acquisition date of

August 6, 2015.

The pro forma effects of the acquisition on the results of operations as if the acquisition had been completed on

April 1, 2015

and

2014,

are as follows (in thousands, except per share data):

	Year Ended March 31,
	201 6		201 5
Revenues	$	86,053	$	75,649
Net income		11,463		10,182
Net Income per common share:
Basic	$	3.18	$	2.89
Diluted		3.05		2.79