XML 21 R10.htm IDEA: XBRL DOCUMENT
v3.23.1

Acquisition | 6 Months Ended
--- | ---
Mar. 31, 2023
Business Combinations [Abstract] |
Acquisition | 3. Acquisition Entrepix Merger On January 17, 2023 (the “Closing Date”), the Company acquired 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, through a reverse triangular merger. Entrepix’s CMP technology portfolio and water cleaning equipment will complement our existing substrate polishing and wet process chemical offerings. Pursuant to the terms and conditions 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” or “Transaction”). On the Closing Date, in connection with the Merger Agreement and in contemplation of the Transaction, the Company entered into a Loan and Security Agreement with UMB Bank, N.A., under which the Lender provided the Company with (i) a $12.0 million term loan maturing January 17, 2028, and (ii) an $8.0 million revolving loan facility maturing January 17, 2024 (see Note 2). The proceeds of the Term Loan were used to partially fund the Transaction. The Acquisition is accounted for using the acquisition method of accounting for business combinations under FASB Accounting Standard Codification Topic No. 805, Business Combinations (“ASC 805”), with Amtech representing the accounting acquirer under this guidance. Summary of Consideration Transferred The total consideration for the Acquisition was $39.8 million, consisting of $35.8 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 FASB Accountings Standard Codification Topic No. 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. Amtech’s acquisition costs incurred were $2.0 million for the six months ended March 31, 2023, and were recorded as “General and administrative expenses” in the accompanying Condensed Consolidated Statements of Operations. The following table summarizes the provisional fair values assigned to identifiable assets acquired and liabilities assumed, in thousands:
Fair value of total cash consideration transferred |  | $ | 39,787 |
Estimated fair value of identifiable assets acquired and liabilities assumed: |  |  |
Cash and cash equivalents |  | $ | 4,289 |
Accounts receivable, net |  |  | 5,681 |
Inventories |  |  | 5,683 |
Other current assets |  |  | 179 |
Property, plant, and equipment |  |  | 2,051 |
Right-of-use assets |  |  | 2,246 |
Intangible assets |  |  | 12,800 |
Goodwill |  |  | 18,089 |
Other assets |  |  | 31 |
Total assets acquired |  |  | 51,049 |
Accounts payable |  |  | 1,574 |
Other accrued liabilities |  |  | 1,170 |
Contract liabilities |  |  | 1,662 |
Income taxes payable |  |  | 1,447 |
Current portion of long-term operating lease liabilities |  |  | 515 |
Long-term operating lease liabilities |  |  | 1,730 |
Deferred tax liability |  |  | 3,164 |
Total liabilities assumed |  |  | 11,262 |
Net assets acquired |  | $ | 39,787 |
The establishment of the allocation to goodwill requires the extensive use of accounting estimates and management judgement. 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 condensed consolidated financial statements for the period ended March 31, 2023, the Company has not finalized its calculation of consideration transferred, intangible assets, deferred tax assets or liabilities, income taxes payable, and the resulting adjustments to goodwill. The calculation of consideration is pending the finalization of working capital adjustments. Intangible assets will be finalized pending management’s final review of the third party valuation report, and 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. 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 |  | $ | 5,900 |  |  | 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 |  |  |  | $ | 12,800 |  |  | 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 March 31, 2023 were $6.3 million and $0.1 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.
|  | Three Months Ended March 31, |  |  | Six Months Ended March 31, |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Revenues, Net |  | $ | 34,623 |  |  | $ | 33,725 |  |  | $ | 63,778 |  |  | $ | 65,825 |
Net Income (Loss) |  | $ | 4,285 |  |  | $ | (35 | ) |  | $ | 1,149 |  |  | $ | 642 |
The unaudited pro forma financial information presented above include the following adjustments: 3 Months Ended March 31, 2023 and March 31, 2022 • reversal of amortization expense on intangible assets acquired of $0.5 million and incremental amortization expense of $0.9 million for the three months ended March 31, 2023 and March 31, 2022, respectively; • incremental interest expense on the Term Loan of $0.2 million for the three months ended March 31, 2023 and March 31, 2022; and • non-recurring adjustments directly attributable to the business combination, including acquisition related costs of $2.0 million for the three months ended March 31, 2022. 6 Months Ended March 31, 2023 and March 31, 2022 • incremental amortization expense on intangible assets acquired of $0.9 million and $1.9 million for the six months ended March 31, 2023 and March 31, 2022, respectively; • incremental interest expense on the Term Loan of $0.3 million and $0.4 million for the six months ended March 31, 2023 and March 31, 2022, respectively; and • non-recurring adjustments directly attributable to the business combination, including acquisition related costs of $2.0 million for the six months ended March 31, 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.

X
- 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 https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration