Acquisitions And Goodwill

12 Months Ended

Dec. 31, 2011

Acquisitions And Goodwill [Abstract]

Acquisitions And Goodwill

Note 14: Acquisitions and Goodwill

On March 3, 2011, we completed our acquisition of Vocollect by acquiring all of the outstanding shares of capital stock of Vocollect and all in-the-money options to purchase shares of common stock of Vocollect for an aggregate purchase price of approximately $197 million in cash, net of cash acquired. Vocollect provides voice-centric solutions for mobile workers in distribution, warehouse and healthcare environments worldwide through design, manufacture and sale of voice data collection terminals and related software. This acquisition is part of our strategy to expand our warehouse and mobility solutions.

We have included the financial results of Vocollect in our consolidated financial statements from the date of acquisition. Vocollect acquisition and related costs of approximately $5.1 million were recorded as an expense for the year ended December 31, 2011, and are included in the total acquisition costs of $6.0 million in our consolidated statement of operations for the year ended December 31, 2011. The remainder of the acquisition costs recorded in the year ended December 31, 2011, relate to the acquisition of Enterprise Mobile. Acquisition related costs include direct integration costs and professional services.

The allocation of the purchase price to Vocollect's assets acquired and liabilities assumed, net of cash acquired, is as follows (in thousands):

	At Acquisition   March 3, 2011		Adjustments		At Acquisition     March 3, 2011 (Adjusted)
Accounts receivable (gross contractual receivables total to $21,461)	$	20,569	$	-	$	20,569
Inventories		6,800		720		7,520
Net deferred tax assets		7,552		328		7,880
Other current assets		1,606		5,747		7,353
Goodwill (including $7.9 million for assembled workforce)		131,167		8,995		140,162
Intangible assets		85,600		(18,100)		67,500
Property, plant and equipment		10,060		(937)		9,123
Other assets		3,235		(3,098)		137
Accounts payable		(6,818)		-		(6,818)
Payroll and related expenses		(531)		(8,281)		(8,812)
Deferred revenue		(11,616)		680		(10,936)
Accrued expenses		(11,231)		2,492		(8,739)
Deferred tax liabilities		(35,370)		12,800		(22,570)
Long-term deferred revenue		(4,282)		-		(4,282)
Other long-term liabilities		(370)		(1,000)		(1,370)
Total net assets acquired	$	196,371	$	346	$	196,717

The adjustments identified above were recorded in the quarters subsequent to the acquisition and are required to properly reflect the fair value of the assets acquired and liabilities assumed in connection with our acquisition of Vocollect on March 3, 2011. We adjusted the value of the acquired inventory, other current assets, intangible assets, property, plant and equipment, other assets, assumed accrued expenses, deferred tax liabilities, deferred revenue and other long-term liabilities. We also recognized an assumed liability of $1.0 million for the probable amount earned under Vocollect's Long Term Incentive Plan ("LTIP"). We finalized our analysis of customer retention rates and reduced the initially assumed useful life of the acquired customer relationships from 13 years to 11 years, in addition to other immaterial changes, which resulted in an $18.1 million reduction in the value of that intangible asset. Deferred tax liabilities were adjusted for the reduction of the customer relationship asset and to recognize the tax benefit attributable to payments anticipated to be made in the future to former Vocollect stock option holders. We finalized the acquisition accounting in the fourth quarter of 2011.

Goodwill recognized is attributable primarily to the expected synergies and the assembled workforce of Vocollect and is not deductible for income tax purposes. Goodwill associated with the Vocollect acquisition has been allocated to the Voice solutions reportable segment.

The carrying value of goodwill by reporting unit as of December 31, 2011 is as follows (in thousands):

Reportable Segment	Reporting Unit	Goodwill
Intermec-branded services:	Intermec Global Services	$	3,348
Voice solutions:	Supply chain		130,682
	Healthcare		9,480
	Total:	$	143,510

Refer to Note 1, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements for a description of our reporting units and the methods used to determine the fair value of our reporting units for purposes of completing the interim and annual impairment analysis.

The changes to the carrying amount of goodwill for the year ended December 31, 2011 are as follows (in thousands):

Goodwill balance at December 31, 2009	$	0
Goodwill from acquisition		1,152
Goodwill balance at December 31, 2010		1,152
Goodwill from acquisition of Vocollect		140,162
Goodwill from other acquisitions		2,196
Goodwill balance at December 31, 2011	$	143,510

The following table presents the total revenue and net income for Vocollect, including amortization of intangibles and other purchase accounting charges resulting from the acquisition of Vocollect for the year ended December 31, 2011 (in thousands):

	Year Ended December 31, 2011
Revenue	$	106,214
Net income		412

Unaudited Pro Forma Financial Information

The unaudited pro forma financial information in the table below summarizes the combined results of operations for Intermec and Vocollect as though the acquisition occurred at the beginning of fiscal 2010. The pro forma financial information presented below is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisitions and any borrowings undertaken to finance the acquisition had taken place at the beginning of fiscal 2010.

	Year Ended December 31,
(in thousands)	2011		2010
Total revenues	$	871,993	$	791,426
Net loss		(23,685)		(19,945)