Business Combinations (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Unaudited Pro Forma Financial Information

The unaudited pro forma financial information is presented for comparative purposes only and is not necessarily indicative of the results of operations that actually would have been achieved if the acquisitions had taken place on January 1, 2016.

	Year Ended December 31,
	2017		2016
Revenue	$	562,818	$	487,960
Income from continuing operations	$	39,630	$	21,020
Earnings per share attributable to Novanta Inc. – Basic (1)	$	0.49	$	0.62
Earnings per share attributable to Novanta Inc. – Diluted (1)	$	0.49	$	0.61

(1) The computation of pro forma earnings per share attributable to Novanta Inc. included $20.2 million and zero adjustment of redeemable noncontrolling interest to estimated redemption value for the years ended December 31, 2017 and 2016, respectively.

World of Medicine GmbH

Summary of Fair Values of Assets Acquired and Liabilities Assumed Purchase Price Allocation

Based upon a preliminary valuation, the total purchase price allocation is as follows (in thousands):

	Amount
Cash	$	1,400
Accounts receivable		11,807
Inventories		14,549
Property, plant and equipment		21,940
Intangible assets		59,732
Goodwill		55,632
Other assets		2,660
Total assets acquired		167,720
Accounts payable		4,398
Other liabilities		8,681
Deferred tax liabilities		19,707
Total liabilities assumed		32,786
Total assets acquired, net of liabilities assumed		134,934
Less: cash acquired		1,400
Total purchase price, net of cash acquired	$	133,534

Fair Value of Intangible Assets

The fair value of intangible assets is comprised of the following (dollar amounts in thousands):

			Weighted Average
	Estimated Fair		Amortization
	Value		Period
Developed technologies	$	21,586	10 years
Customer relationships		35,634	12 years
Trademarks and trade names		2,284	10 years
Backlog		228	1 year
Total	$	59,732

Laser Quantum

Summary of Fair Values of Assets Acquired and Liabilities Assumed Purchase Price Allocation

The final purchase price allocation is as follows (in thousands):

	Amount
Cash	$	15,343
Accounts receivable		2,739
Inventories		6,264
Property, plant and equipment		2,286
Intangible assets		38,955
Goodwill		31,168
Other assets		717
Total fair value of assets		97,472
Accounts payable		796
Other liabilities		2,068
Deferred tax liabilities		7,337
Total fair value of liabilities		10,201
Total fair value of assets, net of fair value of liabilities		87,271
Less: fair value of equity interest previously held by Novanta		34,637
Less: fair value of noncontrolling interest		21,582
Total purchase price paid by Novanta		31,052
Less: cash acquired		15,343
Purchase price, net of cash acquired	$	15,709

Fair Value of Intangible Assets

The fair value of intangible assets is comprised of the following (dollar amounts in thousands):

			Weighted Average
	Estimated Fair		Amortization
	Value		Period
Developed technologies	$	15,501	15 years
Customer relationships		19,990	15 years
Trademarks and trade names		1,964	15 years
Backlog		1,500	9 months
Total	$	38,955

Thing Magic

Summary of Fair Values of Assets Acquired and Liabilities Assumed Purchase Price Allocation

The final purchase price allocation is as follows (in thousands):

	Amount
Inventories	$	1,832
Intangible assets		7,423
Goodwill		9,929
Total assets acquired		19,184
Other liabilities		95
Total liabilities assumed		95
Total purchase price	$	19,089

Fair Value of Intangible Assets

The fair value of intangible assets is comprised of the following (dollar amounts in thousands):

			Weighted Average
	Estimated Fair		Amortization
	Value		Period
Developed technologies	$	4,600	10 years
Customer relationships		2,520	10 years
Trademarks and trade names		303	5 years
Total	$	7,423

Reach Technology Inc.

Summary of Fair Values of Assets Acquired and Liabilities Assumed Purchase Price Allocation

The final purchase price allocation is as follows (in thousands):

	Amount
Cash	$	238
Accounts receivable		991
Inventory		1,611
Prepaid expenses and other current assets		12
Intangible assets		3,953
Goodwill		4,715
Total assets acquired		11,520
Accounts payable		280
Other liabilities		148
Deferred tax liabilities		1,474
Total liabilities assumed		1,902
Total assets acquired, net of liabilities assumed		9,618
Less: cash acquired		238
Total purchase price, net of cash acquired	$	9,380

Fair Value of Intangible Assets

The fair value of intangible assets is comprised of the following (dollar amounts in thousands):

			Weighted Average
	Estimated Fair		Amortization
	Value		Period
Customer relationships	$	2,770	15 years
Developed technology		500	7 years
Trademarks and trade names		258	10 years
Backlog		425	1 year
Total	$	3,953

Skyetek, Lincoln Laser and Applimotion

Summary of Fair Values of Assets Acquired and Liabilities Assumed Purchase Price Allocation

The final purchase price for Skyetek, Lincoln Laser and Applimotion was allocated as follows (in thousands):

	Amount
Cash	$	331
Accounts receivable		3,166
Inventory		3,544
Prepaid expenses and other current assets		148
Property, plant and equipment		3,220
Intangible assets		11,370
Goodwill		12,668
Other assets		10
Total assets acquired		34,457
Accounts payable		1,681
Other liabilities		1,197
Deferred tax liabilities		2,308
Total liabilities assumed		5,186
Total assets acquired, net of liabilities assumed		29,271
Less: cash acquired		331
Total purchase price, net of cash acquired		28,940
Less: contingent consideration		3,459
Net cash used for acquisition of businesses	$	25,481

Fair Value of Intangible Assets

The fair value of intangible assets for Skyetek, Lincoln Laser and Applimotion is comprised of the following (dollar amounts in thousands):

			Weighted Average
	Estimated Fair		Amortization
	Value		Period
Developed technologies	$	4,993	10 years
Customer relationships		4,266	12 years
Trademarks and trade names		593	9 years
Non-compete covenant		684	4 years
Backlog		834	1 year
Total	$	11,370