15. Redeemable Noncontrolling Interest

As a result of the Company’s acquisition of additional outstanding shares of Laser Quantum from the remaining shareholders on January 10, 2017, the Company increased its ownership position in Laser Quantum from approximately 41% to approximately 76% and began to consolidate Laser Quantum in the consolidated financial statements. As part of the purchase agreement, the Company and the remaining shareholders entered into a call and put option agreement for the purchase and sale, in 2020, of all remaining Laser Quantum shares held by the remaining shareholders, subject to certain conditions. The purchase price for the remaining shares will be based on the proportionate share of the noncontrolling interest in Laser Quantum’s cash on hand as of December 31, 2019 and a multiple of Laser Quantum’s EBITDA for the twelve months ending December 31, 2019, as defined in the call and put option agreement. As a result of the put option held by the remaining shareholders, the noncontrolling interest is considered a redeemable equity instrument and is presented as temporary equity on the consolidated balance sheet. The proportionate share of the net income from Laser Quantum attributable to the noncontrolling interest has been reported as a reduction to the consolidated net income in the Company’s consolidated statement of operations and an increase to the carrying value of the redeemable noncontrolling interest.

The initial value of the noncontrolling interest was measured at a fair value of £17.7 million ($21.6 million) as of January 10, 2017. This was determined using a combination of the discounted cash flow method (an income approach), the guideline public company method (a market approach), and the subject company transaction method (a market approach). On the consolidated balance sheet, the Company reports the redeemable noncontrolling interest at the higher of (i) the carrying value without any redemption value adjustments or (ii) the estimated redemption value as of the end of the reporting period. The estimated redemption value is determined as of the end of the reporting period as if it were also the redemption date for the instrument. The resulting adjustments are recorded in retained earnings in shareholders’ equity and do not affect net income attributable to Novanta Inc. However, these adjustments are included in the determination of earnings per common share (See Note 5).

During the six months ended June 29, 2018, the Company increased the reported value of the redeemable noncontrolling interest by $5.1 million to reflect the estimated redemption value as of June 29, 2018. The following table summarizes the changes in the Company’s redeemable noncontrolling interest in the six months ended June 29, 2018 (in thousands):

	Redeemable Noncontrolling Interest
Balance as of December 31, 2017	$	46,923
Acquisition of noncontrolling interest		(149	)
Net income attributable to noncontrolling interest		1,551
Adjustment of redeemable noncontrolling interest to estimated redemption value		5,096
Foreign currency translation		(1,815	)
Balance as of June 29, 2018	$	51,606