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Note 2 - Significant Transactions

6 Months Ended

Sep. 30, 2022

Note 2. Significant Transactions

On October 20, 2021, we completed the acquisition of Agena Bioscience, Inc. (“Agena”) for $300,793, net of cash acquired but inclusive of working capital adjustments (the “Agena Acquisition”). The Agena Acquisition aligned with our overall acquisition strategy, moved our business towards the life sciences tools sector, and expanded our market opportunities, particularly in Asia. Agena is a leading clinical genomics tools company that develops, manufactures, markets, and supports proprietary instruments and related consumables and services that enable genetic analysis for a broad range of diagnostic and research applications. Using Agena's MassARRAY® instruments and chemical reagent solutions, customers can analyze DNA samples for a variety of high volume clinical testing applications, such as inherited genetic disease testing, pharmacogenetics, various oncology tests, infectious disease testing, and other highly differentiated applications.

We funded the acquisition and transactions relating thereto with cash on hand and borrowings under the Credit Facility (as defined below). Of the cash consideration we paid, approximately $267,000 represented cash consideration to holders of Agena’s preferred and common stock, approximately $2,000 represented cash consideration paid for the settlement of Agena’s warrants, and approximately $31,800 represented cash consideration for the settlement of Agena's vested stock options as of the closing date.

Agena Preliminary Purchase Price Allocation

During the three months ended September 30, 2022, we continued analyses of the valuation of net assets acquired in the Agena Acquisition. This preliminary purchase price allocation is subject to revision as more detailed analyses are completed with respect to prepaid taxes, tax accruals, and deferred tax positions.

The following table summarizes the allocation of the purchase price as of October 20, 2021:

	*Life (in years)*		*Amount*
Cash and cash equivalents			$	7,544
Accounts receivable				11,100
Other current assets				25,480
Total current assets				44,124
Property, plant and equipment/noncurrent assets				15,832
Deferred tax asset				811
Intangible assets:
Goodwill		N/A		136,260
Customer relationships		12		103,800
Intellectual property		8		45,400
Tradenames		12		15,700
Total Assets acquired			$	361,927

Accounts payable				2,174
Unearned revenues				2,713
Other current liabilities				12,217
Total current liabilities				17,104
Deferred tax liability				28,223
Other noncurrent liabilities				8,263
Total liabilities assumed			$	53,590
Total purchase price, net of cash acquired			$	300,793

Acquired Goodwill

Acquired goodwill of $136,260, all of which is allocated to the Clinical Genomics reportable segment, represents the value expected to arise from expanded market opportunities, expected synergies, and assembled workforce, none of which qualify as amortizable intangible assets. The goodwill acquired is not deductible for income tax purposes.

Unaudited Pro Forma Information

The following unaudited pro forma financial information presents the combined results of operations of Mesa and Agena as if the acquisition had occurred on April 1, 2021 after giving effect to certain pro forma adjustments.

	*Three Months Ended September 30,*				*Six Months Ended September 30,*
	*2022*		*2021*		*2022*		*2021*
Pro forma total revenues	$	58,749	$	53,521	$	109,202	$	107,074
Pro forma net income		1,504		1,916		329		4,437

The pro forma financial information includes adjustments that are directly attributable to the business combinations and are factually supportable. The pro forma adjustments include incremental amortization of intangible assets, additional stock-based compensation expense for key Agena employees, the removal of interest expense attributable to Agena’s external debt that was paid off as part of the acquisition, and the pro forma tax impact for such adjustments. Cost savings or operating synergies expected to result from the acquisition are not included in the pro forma results. For the three and six months ended September 30, 2022, the pro forma financial information excludes $267 and $623 of non-recurring acquisition-related expenses, respectively. These pro forma results are illustrative only and not indicative of the actual results of operations that would have been achieved nor are they indicative of future results of operations.