Business Acquisition

12 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

Business Acquisition

2. Business Acquisition

On July 27, 2018, the Company acquired Quantum Technology Sciences, Inc., a Florida-based tactical security and surveillance systems solutions provider (“Quantum”) through a merger of the Company’s subsidiary with and into Quantum, with Quantum as the surviving corporation.  The acquisition represents the Company’s strategy to expand its product revenues, as well as its engineering and manufacturing competencies, to markets outside the oil and gas industry.    

The acquisition purchase price for Quantum consisted of a cash down payment at closing of approximately $4.4 million and contingent earn-out payments of up to $23.5 million over a four-year period.  

In connection with the acquisition the Company recorded goodwill and other intangible assets of $12.5 million and established an initial contingent earn-out liability of $7.7 million.  Current assets and current liabilities of $0.2 million and $0.6 million were acquired in the transaction.  The contingent earn-out payments, if any, which may be paid in the form of cash or Company stock, will be derived from certain eligible revenue that may be generated during the four-year earn-out period.

Acquisition related costs of $0.3 million incurred in connection with the transaction are included in selling, general and administrative expenses in the Company’s consolidated financial statements.