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Acquisitions | 12 Months Ended
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Sep. 30, 2023
Business Combinations [Abstract] |
Acquisitions | 2. Acquisi tions Entrepix On January 17, 2023 (the “Closing Date”), the Company acquired through a reverse triangular merger 100% of the issued and outstanding shares of capital stock of Entrepix, Inc., an Arizona corporation (“Entrepix”), which primarily manufactures chemical mechanical polishing (“CMP”) technology. Entrepix’s CMP technology portfolio and water cleaning equipment complements our existing substrate polishing and wet process chemical offerings. Under the terms of the Agreement and Plan of Merger dated January 17, 2023 (the “Merger Agreement”), Emerald Merger Sub, Inc., a wholly-owned subsidiary of the Company (“Merger Sub”), merged with and into Entrepix (the “Merger”), resulting in Entrepix surviving the Merger and becoming a wholly-owned subsidiary of the Company (the “Acquisition”). On the Closing Date, in contemplation of the Acquisition, the Company entered into a Loan and Security Agreement with UMB Bank, N.A. (the “Lender”), under which the Lender provided the Company with (i) a $12.0 million term loan maturing January 17, 2028 (“Term Loan”), and (ii) an $8.0 million revolving loan facility maturing January 17, 2024 (see Note 12). The proceeds of the Term Loan were used to partially fund the Acquisition. The Acquisition is accounted for using the acquisition method of accounting for business combinations under FASB ASC Topic No. 805, Business Combinations (“ASC 805”), with Amtech representing the accounting acquirer under this guidance. The Company elected to apply pushdown accounting per ASC 805-50-50-5. Summary of Consideration Transferred – The total consideration for the Acquisition was $39.2 million, consisting of $35.2 million cash consideration to the sellers and $4.0 million cash paid for debt and Entrepix transaction costs. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Such assets include synergies the Company expects to achieve, such as deeper penetration into an overlapping customer base, complementary product offerings, and cost redundancy reductions. In accordance with the measurement principles in ASC 820, Fair Value Measurement, the purchase consideration for the Acquisition has been allocated under the acquisition method of accounting to the estimated fair market value of the net assets acquired, including a residual amount of goodwill, none of which is deductible for tax purposes. The recorded amounts of acquired accounts receivable and accounts payable approximate their fair value because of the short maturities of these assets and liabilities. The fair value of acquired property, plant and equipment was based on quoted market prices for similar assets in active markets. The fair value of acquired identifiable intangible assets were estimated using various valuation methodologies, including the multi-period excess earnings method, the relief from royalty method and the distributor method. Amtech’s acquisition costs incurred we re $2.5 million as of year ended September 30, 2023, and were recorded as selling, general and administrative expenses in the accompanying Consolidated Statements of Operations. The following table summarizes the provisional fair values assigned to identifiable assets acquired and liabilities assumed, in thousands:
|  | January 17, 2023 |  | Measurement Period Adjustments |  | September 30, 2023 |
Fair value of total cash consideration transferred |  | $ | 39,787 |  | $ | (560 | ) | $ | 39,227 |
Estimated fair value of identifiable assets acquired and liabilities assumed: |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 4,289 |  | $ | — |  | $ | 4,289 |
Accounts receivable, net |  |  | 5,681 |  |  | 203 |  |  | 5,884 |
Inventories |  |  | 5,683 |  |  | — |  |  | 5,683 |
Other current assets |  |  | 179 |  |  | — |  |  | 179 |
Property, plant, and equipment |  |  | 2,051 |  |  | (11 | ) |  | 2,040 |
Right-of-use assets |  |  | 2,246 |  |  | — |  |  | 2,246 |
Intangible assets |  |  | 12,800 |  |  | 800 |  |  | 13,600 |
Goodwill |  |  | 18,089 |  |  | (1,626 | ) |  | 16,463 |
Other assets |  |  | 31 |  |  | 49 |  |  | 80 |
Total assets acquired |  |  | 51,049 |  |  | (585 | ) |  | 50,464 |
Accounts payable |  |  | 1,574 |  |  | — |  |  | 1,574 |
Other accrued liabilities |  |  | 1,170 |  |  | 824 |  |  | 1,994 |
Contract liabilities |  |  | 1,662 |  |  | 287 |  |  | 1,949 |
Income taxes payable |  |  | 1,447 |  |  | (462 | ) |  | 985 |
Current portion of long-term operating lease liabilities |  |  | 515 |  |  | — |  |  | 515 |
Long-term operating lease liabilities |  |  | 1,730 |  |  | — |  |  | 1,730 |
Deferred tax liability |  |  | 3,164 |  |  | (674 | ) |  | 2,490 |
Total liabilities assumed |  |  | 11,262 |  |  | (25 | ) |  | 11,237 |
Net assets acquired |  | $ | 39,787 |  | $ | (560 | ) | $ | 39,227 |
The establishment of the allocation to goodwill requires the extensive use of accounting estimates and management judgment. In accordance with ASC 805, the Company has up to one year from the acquisition date (referred to as the measurement period) to account for changes in the fair values of the identifiable assets acquired and the liabilities assumed in the acquired entity. As of the issuance of the consolidated financial statements for the year ended September 30, 2023, the Company has not finalized its calculation of deferred tax assets or liabilities, income taxes payable, and the resulting adjustments to goodwill. The tax-related items will be finalized pending a consolidated analysis of the combined tax attributes of the Acquisition. If a change in any of these items is identified during the measurement period, the Company will record the cumulative impact of measurement period adjustments in the period the adjustment is identified. Certain measurement period adjustments were recorded during the year ended September 30, 2023, primarily arising from the Company's finalization of the valuation of acquired assets and updated assumptions underlying the tax provision. These adjustments were all offset against goodwill. The fair value associated with acquired intangible assets and their associated weighted-average amortization periods consist of the following, in thousands:
|  | Classification of Amortization |  | Amount |  |  | Weighted-Average Amortization Period
Developed technology |  | Cost of sales |  | $ | 6,700 |  |  | 5.0 years
Customer relationships |  | Selling, general and administrative |  |  | 2,800 |  |  | 10.0 years
Backlog |  | Selling, general and administrative |  |  | 2,100 |  |  | 1.0 year
Trade names |  | Selling, general and administrative |  |  | 1,800 |  |  | 10.0 years
Noncompetition agreements |  | Selling, general and administrative |  |  | 200 |  |  | 5.0 years
Total intangible assets |  |  |  | $ | 13,600 |  |  | 6.1 years
Unaudited Pro Forma Financial Information – Entrepix is included in the Company’s consolidated results beginning January 17, 2023. Total revenues and net loss attributable to Entrepix for the period from January 17, 2023 to September 30, 2023 wer e $18.6 million and $(3.7) million, respectively. The following unaudited pro forma financial information presents the combined results of operations of Amtech and Entrepix, in thousands, as if the acquisition occurred on October 1, 2021. The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on the date indicated or of results that may occur in the future.
|  | Year Ended September 30 |
|  | 2023 |  |  | 2022 |
Revenues, Net |  | $ | 121,020 |  |  | $ | 129,781 |
Net (Loss) Income |  | $ | (13,099 | ) |  | $ | 13,946 |
The unaudited pro forma financial information presented above include the following adjustments: Year ended September 30, 2023 and September 30, 2022 • incremental of amortization expense on intangible assets acquired of $1.0 million and $3.9 mill ion for the year ended September 30, 2023 and September 30, 2022, respectively; • reversal of depreciation expense for property, plant, and equipment of $0.2 million and $0.2 million for the year ended September 30, 2023 and September 30, 2022, respectively; • incremental interest expense on the Term Loan of $0.6 million and $0.7 million for the year ended September 30, 2023 and September 30, 2022, respectively; and • non-recurring adjustments directly attributable to the business combination, including acquisition related costs of $2.5 million for the year ended September 30, 2022. The unaudited pro forma financial information includes adjustments to align accounting policies, which were materially similar to the Company’s accounting policies. Any differences in accounting policies were adjusted to reflect the accounting policies of the Company in the unaudited pro forma financial information presented. Intersurface Dynamics On March 3, 2021, we acquired 100% of the issued and outstanding capital stock of Intersurface Dynamics, a Connecticut-based manufacturer of substrate process chemicals used in various manufacturing processes, including semiconductors, silicon and compound semiconductor wafers, and optics, for a cash purchase price of $5.3 million. The total fair value of net assets acquired was approximately $0.7 million, including $0.4 million of identifiable intangible assets consisting of customer relationships and trade name, which are amortized using the straight-line method over their estimated useful lives of ten and three years, respectively. Goodwill acquired approximated $4.5 million, which was recorded in our Material and Substrate segment. Intersurface Dynamics's results of operations are included in our Material and Substrate segment from the date of acquisition. Our historical results would not have been materially affected by the acquisition of Intersurface Dynamics.

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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://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent + Details
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