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ACQUISITION | 12 Months Ended
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Dec. 31, 2021
Business Combination and Asset Acquisition [Abstract] |
ACQUISITION | ACQUISITION On October 7, 2021, we entered into a Stock Purchase Agreement and acquired all of the issued and outstanding shares of capital stock of Printronix. Printronix became a consolidated subsidiary of our operations as of this date. Printronix provides multi-technology printing solutions for the industrial, financial and logistics transportation industries. Printronix is engaged in the business of selling (i) line matrix printers, serial dot matrix printers, impact printers and related consumables and parts, (ii) continuous form paper, (iii) printer management tools and (iv) services related to the foregoing throughout the world. The products are generally used in industrial settings such as manufacturing plants and distribution centers. Printronix has a manufacturing site located in Malaysia and third-party configuration sites located in the United States, Singapore, and Holland, along with sales and support locations around the world to support its global network of users, channel partners and strategic alliances. The following unaudited pro forma summary presents consolidated information, as if the business combination had occurred on January 1, 2020:
| Years Ended December 31,
| 2021 |  | 2020
| (Unaudited, in thousands)
Pro forma: |  |  |
Revenues | $ | 119,725 |  |  | $ | 67,663 |
Net income attributable to Acacia Research Corporation | 153,641 |  |  | 106,919 |
We had material, nonrecurring pro forma adjustments directly attributable to the business combination included in the above pro forma revenues and net income. These adjustments included an increase of $2.8 million in property and equipment related to the finalization of the valuations and an increase of $1.9 million related to finished goods inventory. The adjustments also included a decrease of $557,000 in deferred revenue. In 2021, we incurred $457,000 of acquisition-related costs. These expenses are included in general and administrative expenses for the year ended December 31, 2021 and are reflected in pro forma net income for the year ended December 31, 2020, in the table above. The following table summarizes the consideration transferred to acquire Printronix and the recognized amounts of identifiable assets acquired and liabilities assumed at the acquisition date (in thousands):
Fair value of consideration transferred: |
Cash | $ | 35,937 |
Transaction expenses paid to Sellers | 1,405 |
Other purchase price adjustments | (200) |
Total consideration | 37,142 |
Identifiable assets acquired and liabilities assumed: |
Cash and cash equivalents | 3,892 |
Trade receivables | 8,281 |
Inventories | 10,837 |
Prepaid expenses and other current assets | 2,786 |
Property, plant and equipment, net | 4,261 |
Leased right-of-use assets | 1,590 |
Customer relationships | 5,300 |
Trade names and trademarks | 3,430 |
Patents | 3,400 |
Other assets | 752 |
Trade and other payables | (7,849) |
Deferred revenue | (1,941) |
Long-term lease liabilities | (1,590) |
Other long-term liabilities | (3,477) |
Total identifiable net assets | 29,672 |
Goodwill | $ | 7,470 |
Intangible Assets and Liabilities As of December 31, 2021, management has finalized the valuations of all acquired assets and liabilities assumed in the acquisition. Goodwill of $7.5 million represents the excess of the consideration transferred over the estimated fair values of assets acquired and liabilities assumed. The goodwill recognized is primarily attributed to the assembled workforce of Printronix and new customer relationships that did not exist at the time of the transaction. None of the goodwill resulting from the acquisition is deductible for tax purposes. All of the goodwill acquired is allocated to the Printronix reporting unit. Other intangible assets include $5.3 million of customer relationships, $3.4 million of patents, and $3.4 million of trade names and trademarks, all with weighted average useful lives of 7 years. Refer to Note 8 for additional information. The fair values of all intangibles were estimated using the income approach. Specifically, the multi-period excess earnings method was applied in the valuation of the customer relationships, and the relief-from-royalty method was applied in the valuation of the patents and trade names. These fair value measurements are based on significant inputs unobservable in the market and, therefore, represent a Level 3 measurement as defined in ASC 820. The key assumptions in applying the multi-period excess earnings method include the discount rate, attrition rate, estimated profit margin and contributory asset charges. The key assumptions in applying the relief-from-royalty method include the applicable projected revenues, discount rate, remaining economic life or rate of obsolescence and estimated royalty rate. Refer to Note 11 for additional information related to fair value measurements.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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