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Business Acquisitions | 12 Months Ended
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Mar. 31, 2019
Business Combinations [Abstract] |
Business Acquisitions | Business Acquisitions Fiscal Year 2019 Acquisition Blue Microphones Acquisition On August 21, 2018 (the "Blue Microphones Acquisition Date"), the Company acquired all equity interests in Blue Microphones Holding Corporation ("Blue Microphones") for a total consideration of $134.8 million in cash (the "Blue Microphones Acquisition"), which included a working capital adjustment and repayment of debt on behalf of Blue Microphones. Blue Microphones is a leading audio manufacturer that designs and produces microphones, headphones, recording tools, and accessories for audio professionals, musicians and consumers. The Blue Microphones Acquisition supplements the Company's product portfolio. Blue Microphones met the definition of a business, and therefore the acquisition is accounted for using the acquisition method. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the Blue Microphones Acquisition Date (in thousands):
|  | Estimated Fair Value
Cash and cash equivalents |  | $ | 1,110 |
Accounts receivable |  | 10,979 |
Inventories |  | 19,546 |
Other current assets |  | 997 |
Property, plant and equipment |  | 452 |
Intangible assets |  | 55,567 |
Total identifiable assets acquired |  | $ | 88,651 |
Accounts payable |  | (10,322 | )
Accrued liabilities |  | (11,162 | )
Other long-term liabilities |  | (661 | )
Net identifiable assets acquired |  | $ | 66,506 |
Goodwill |  | 68,269 |
Net assets acquired |  | $ | 134,775 |
Goodwill related to the acquisition is primarily attributable to opportunities and economies of scale from combining the operations and technologies of Logitech and Blue Microphones and is not deductible for tax purposes. The fair value of the inventory acquired is estimated at its net realizable value, which uses the estimated selling prices, less the cost of disposal and a reasonable profit allowance for the selling efforts. The difference between the fair value of the inventories and the amount recorded by Blue Microphones immediately before the acquisition date is $1.8 million, which has been recognized in "amortization of intangibles assets and purchase accounting effect on inventory" in the consolidated statements of operations upon the sale of the acquired inventory. The following table summarizes the estimated fair values and estimated useful lives of the components of intangible assets acquired as of the Blue Microphones Acquisition Date (Dollars in thousands):
| Fair Value |  | Estimated Useful Life (years)
Developed technology | $ | 17,967 |  |  | 5.0
Customer relationships | 25,100 |  |  | 10.0
Trademark and trade name | 12,500 |  |  | 7.0
Total intangible assets acquired | $ | 55,567 |  |  | 7.7
Intangible assets acquired as a result of the Blue Microphones Acquisition are being amortized over their estimated useful lives using the straight-line method of amortization, which materially approximates the distribution of the economic value of the intangible assets. Amortization of developed technology of $2.1 million during the year ended March 31, 2019 is included in "amortization of intangible assets and purchase accounting effect of inventory" in the consolidated statements of operations. Amortization of customer relationships, trademark and trade names of $2.5 million during the year ended March 31, 2019 is included in "amortization of intangible assets and acquisition-related costs" in the consolidated statements of operations. Developed technology relates to existing Blue Microphones products. The economic useful life was determined based on the technology cycle related to developed technology of existing products, as well as the cash flows anticipated over the forecasted periods. Customer relationships represent the fair value of future projected revenue that will be derived from sales of products to existing customers of Blue Microphones. The economic useful life was determined based on historical customer attrition rates and industry benchmarks. Trademark and trade name relates to “Blue Microphones”. The economic useful life was determined based on the expected life of the trade name and the cash flows anticipated over the forecasted periods. The fair values of developed technology and trade name were estimated using the relief-from-royalty method, an income approach (Level 3), which estimates the cost savings that accrue to the owner of the intangible assets that would otherwise be payable as royalties or license fees on revenues earned through the use of the asset. A royalty rate is applied to the projected revenues associated with the intangible assets to determine the amount of savings, which is then discounted to determine the fair value. The developed technology and trade name were valued using royalty rates of 10% and 3%, respectively, and both were discounted at a rate of 11%. The fair value of customer relationships was estimated using the excess earnings method, an income approach (Level 3), which converts projected revenues and costs into cash flows. To reflect the fact that certain other assets contributed to the cash flows generated, the returns for these contributory assets were removed to arrive at estimated cash flows solely attributable to the customer relationships, which were discounted at a rate of 11%. The Company believes the fair value of the intangible assets recorded above approximates the amounts a market participant would pay for these intangible assets as of the Acquisition Date. The Company included Blue Microphones' estimated fair value of assets acquired and liabilities assumed in its consolidated balance sheet beginning on the Blue Microphones Acquisition Date. The results of operations for Blue Microphones subsequent to the acquisition date have been included in, but are not material to, the Company's consolidated statements of operations. For the year ended March 31, 2019, Blue Microphones contributed $45.7 million to sales, representing approximately 2% of the sales of the Company. Fiscal Year 2018 Acquisitions ASTRO Acquisition On August 11, 2017 (the ASTRO Acquisition Date), the Company acquired certain assets and liabilities constituting the ASTRO Gaming business (ASTRO) from AG Acquisition Corporation for a purchase price of $85.0 million in cash (the ASTRO Acquisition). ASTRO is a leading console gaming accessory brand with a history of producing award-winning headsets for professional gamers and enthusiasts. ASTRO provides the Company with a strong growth platform in the console gaming accessories market. ASTRO meets the definition of a business, and its acquisition is accounted for using the acquisition method. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the ASTRO Acquisition Date (in thousands):
|  | Estimated Fair Value
Inventories |  | $ | 10,331 |
Property, plant and equipment |  | 2,760 |
Intangible assets |  | 52,520 |
Other assets |  | 605 |
Total identifiable assets acquired |  | 66,216 |
Accrued liabilities |  | (2,982 | )
Net identifiable assets acquired |  | 63,234 |
Goodwill |  | 21,766 |
Net assets acquired |  | $ | 85,000 |
Goodwill related to the acquisition is primarily attributable to opportunities and economies of scale from combining the operations and technologies of Logitech and ASTRO. Goodwill is expected to be deductible for tax purposes. The fair value of the inventory acquired is estimated at their net realizable value, which uses the estimated selling prices, less the costs of disposal and a reasonable profit allowance for the selling efforts. The difference between the fair value of the inventories and the amount recorded by ASTRO immediately before the ASTRO Acquisition Date is $0.8 million, which has been recognized in "amortization of intangibles assets and purchase accounting effect on inventory" in the consolidated statements of operations upon the sale of the acquired inventory. The following table summarizes the estimated fair values and estimated useful lives of the components of intangible assets acquired as of the ASTRO Acquisition Date (Dollars in thousands):
| Fair Value |  | Estimated Useful Life (years)
Developed technology | $ | 12,540 |  |  | 4.0
Customer relationships | 33,100 |  |  | 8.0
Trademark and trade name | 6,880 |  |  | 6.0
Total intangible assets acquired | $ | 52,520 |  |  | 6.8
Intangible assets acquired as a result of the ASTRO Acquisition are being amortized over their estimated useful lives using the straight-line method of amortization, which materially approximates the distribution of the economic value of the intangible assets. Amortization of developed technology of $3.1 million and $2.0 million during the year ended March 31, 2019 and 2018, respectively, is included in "amortization of intangible assets and purchase accounting effect of inventory" in the consolidated statements of operations. Amortization of customer relationships and trade name of $5.3 million and $3.3 million during the year ended March 31, 2019 and 2018, respectively, is included in "amortization of intangible assets and acquisition-related costs" in the consolidated statements of operations. Developed technology relates to existing ASTRO gaming headset products. The economic useful life was determined based on the technology cycle related to developed technology of existing products, as well as the cash flows anticipated over the forecasted periods. Customer relationships represent the fair value of future projected revenue that will be derived from sales of products to existing customers of ASTRO. The economic useful life was determined based on historical customer attrition rates and industry benchmarks. Trademark and trade name relates to “ASTRO”. The economic useful life was determined based on the expected life of the trade name and the cash flows anticipated over the forecasted periods. The fair value of developed technology and trade name was estimated using the relief-from-royalty method, an income approach (Level 3), which estimates the cost savings that accrue to the owner of the intangible assets that would otherwise be payable as royalties or license fees on revenues earned through the use of the asset. A royalty rate is applied to the projected revenues associated with the intangible assets to determine the amount of savings, which is then discounted to determine the fair value. The developed technology and trade name were valued using royalty rates of 10% and 2%, respectively, and both were discounted at a rate of 13%. The fair value of customer relationships was estimated using the excess earnings method, an income approach (Level 3), which converts projected revenues and costs into cash flows. To reflect the fact that certain other assets contributed to the cash flows generated, the returns for these contributory assets were removed to arrive at estimated cash flows solely attributable to the customer relationships, which were discounted at a rate of 13%. The Company believes the value of intangible assets recorded above approximates the amounts a market participant would pay for, these intangible assets as of the ASTRO Acquisition Date. The Company included ASTRO's estimated fair value of assets acquired and liabilities assumed in its consolidated balance sheets beginning on the ASTRO Acquisition Date. The results of operations for ASTRO have been included in, but are not material to, the Company's consolidated statements of operations from the ASTRO Acquisition Date. In November 2017, the Company also made a small technology acquisition for a total consideration of $5.2 million, including cash acquired of $0.9 million. Change in fair value of contingent consideration for business acquisition On April 20, 2016 (the Jaybird Acquisition Date), the Company acquired all of the equity interests of JayBird, LLC (Jaybird), a Utah limited liability company that develops Bluetooth earbuds, activity trackers, and accessories for sports and active lifestyles, for a purchase price of $54.2 million in cash, with an additional earn-out of up to $45.0 million based on the achievement of certain net revenue growth targets over approximately a two year period (the Jaybird Acquisition). If the net revenue growth targets would have been met, the Company would have paid a maximum of $25.0 million and $20.0 million in fiscal years 2018 and 2019, respectively. The fair value of the earn-out as of the Jaybird Acquisition Date was $18.0 million. The fair value of the contingent consideration decreased by $4.9 million and $8.1 million for the year ended March 31, 2018 and 2017, respectively, resulting primarily from Jaybird's lower-than-expected sales and revised projected sales in the remaining earn-out period. In October 2017, Logitech and the sellers of Jaybird entered into an agreement fully, irrevocably and unconditionally releasing Logitech from the earn-out rights and payments in exchange for $5.0 million in cash, which was paid in November 2017. Acquisition-related costs and pro forma results of operations The Company incurred acquisition-related costs of approximately $1.7 million, $1.4 million and $1.5 million, in aggregate, for the year ended March 31, 2019, 2018 and 2017, respectively. The acquisition-related costs are included in "Amortization of intangible assets and acquisition-related costs" in the consolidated statements of operations. Pro forma results of operations for the all the acquisitions completed in fiscal year 2019 and 2018 have not been presented because the effects of these acquisitions are not material to the consolidated statements of operations individually or in aggregate for each year.

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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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