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Acquisition | 12 Months Ended
--- | ---
Dec. 31, 2018
Acquisition Disclosure [Abstract] |
Acquisitions Disclosure [Text Block] | 5. Acquisition On January 31, 2018, the Company acquired all of the issued and outstanding shares of Data Sciences International, Inc. (DSI), a Delaware corporation, for approximately $71.1 million. The Company funded the acquisition from its existing cash balances, excess proceeds from the Denville Transaction discussed in Note 6, and proceeds from the Financing Agreement discussed in Note 15. DSI, a St. Paul, Minnesota-based life science research company, is a recognized leader in physiologic monito ring focused on delivering preclinical products, systems, services and solutions to its customers. Its customers include pharmaceutical and biotechnology companies, as well as contract research organizations, academic labs and government researchers. This acquisition diversifies the Company’s customer base into the biopharmaceutical and contract research organization markets. The aggregate purchase price for this acquisition was allocated to tangible and intangible net assets acquired as follows:
|  | (in thousands) |
Tangible assets | $ | 34,010 |
Liabilities assumed |  | (11,949) |
Net assets |  | 22,061 |
Goodwill and intangible assets: |  |  |
Goodwill |  | 21,865 |
Amortizable intangible assets: |  |  |
Trade name |  | 3,524 |
Developed technology |  | 25,570 |
Customer relationships |  | 9,837 |
In-process research and development |  | 1,387 |
Total amortizable intangible assets |  | 40,318 |
Deferred tax liabilities, net |  | (13,120) |
Total goodwill and intangible assets, net of tax |  | 49,063 |
Acquisition purchase price | $ | 71,124 |
Tangible assets and liabilities assumed, as referenced above, consist of the following:
Cash acquired | $ | 2,576 |
Accounts receivable, net |  | 5,069 |
Inventories |  | 11,512 |
Other current assets |  | 810 |
Property, plant and equipment, net |  | 3,574 |
Deferred income tax assets, net |  | 10,469 |
Tangible assets | $ | 34,010 |
Accounts payable and accrued liabilities | $ | 6,001 |
Deferred revenue including customer advances |  | 2,976 |
Other long term liabilities |  | 2,972 |
Liabilities assumed | $ | 11,949 |
The allocation of the purchase price for DSI was based on estimates of the fair value of the net assets acquired and was subject to adjustment upon finalization of the valuation of the acquired intangible assets and the related deferred taxes. Measurements of these items inherently require significant estimates and assumptions. During the year ended December 31, 2018, the Company made adjustments to the preliminary allocation of the purchase price that was presented in the March 31, 2018 Form 1 0-Q. The a djustments consisted of an increase of $4.5 million to deferred tax liabilities; an increase of $3.1 million to goodwill; a decrease of $1.6 million to other long term liabilities; an increase of $1.5 million to property, plant and equipment, net; an increase of $0.6 million in accounts payable and accrued liabilities; and an increase of $0.6 million to the purchase price related to a net working capital adjustment. As of December 31, 2018, the Company has finalized the purchase price allocation f or DSI. T he weighted-average amortization periods for definite-lived intangible assets acquired are 9.4 years for tradenames, 8.2 years for developed technology, 12.4 years for customer relationshi ps and 7.4 years for in-process research and development assets. The weighted average amortization period f or all definite-lived intangible assets acquired is 9.3 years. Goodwill recorded as a result of the acquisition of DSI is not deductible for tax purposes. The results of operations for DSI have been included in the Company’s consolidated financial statements from the date of acquisition. T he revenues of DSI included in the Company’s consolidated statement of operatio ns from the date of acquisition were approximately $42.6 million for the eleven-month period ended December 31, 2018. The net income of DSI included in the Company’s consolidated statement of operations for the same period was approximately $1.8 million. Included in DSI’s net income was a $3.8 million charge recognized in cost of revenues related to purchase accounting inventory fair value step up amortization. The total inventory fair value step up was recognized into cost of revenues over one in ventory turn, or approximately five and a half months. Also included in net income of DSI is $4.0 million of intangible asset amortization expense and $0.6 million of additional depreciation related to a step up of fair value of property, plant and equipm ent, net. The following consolidated pro forma information is based on the assumption that the acquisition of DSI occurred on January 1, 2017. Accordingly, the historical results have been adjusted to reflect amortization expense, interest expense and o ther purchase accounting adjustments that would have been recognized on such a pro forma basis. The pro forma information is presented for comparative purposes only and is not necessarily indicative of the financial position or results of operations which would have been reported had the Company completed the acquisition during these periods or which might be reported in the future.
|  | Year Ended December 31,
|  | 2018 |  | 2017
| (in thousands)
Pro Forma |  |  |  |
Revenues | $ | 124,319 | $ | 121,104
Income (loss) from continuing operations |  | 3,614 |  | (8,454)
Direct acquisition costs recorded in other expense, net in the Company’s consolidated statements of operations were $3.4 million and $0 for the year ended December 31, 2018 and 2017, respectively.

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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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