Acquisitions

9 Months Ended

Sep. 30, 2019

4. 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 5, and proceeds from the Financing Agreement discussed in Note 14.

DSI, a St. Paul, Minnesota-based life science research company, is a recognized leader in physiologic monitoring 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 results of operations for DSI have been included in the Company’s consolidated financial statements from the date of acquisition. Included in the net loss for the nine months ended September 30, 2018 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 inventory turn, or approximately five and a half months. Also included in the net loss of DSI for that period was $2.9 million of intangible asset amortization expense.

The following consolidated pro forma information is based on the assumption that was used at the time of the acquisition of DSI. Accordingly, the historical results have been adjusted to reflect amortization expense, interest expense and other 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.


	Nine Months Ended
	September 30,
	2018
	(in thousands)
Pro Forma
Revenues	$	90,384
Income (loss) from continuing operations		(236)

Direct acquisition costs recorded in other expense, net in the Company’s consolidated statements of operations were $3.0 million for the nine months ended September 30, 2018.