Acquisitions and Equity Method Investments

9 Months Ended

Apr. 30, 2024

Business Combination and Asset Acquisition [Abstract]

Acquisitions and Equity Method Investments

Note 2. Acquisitions and Equity Method Investments

Acquisitions

Univercells Technologies (UTEC)

In the fourth quarter of fiscal 2023, the Company acquired UTEC, headquartered in Nivelles, Belgium, for cash consideration of €134.6 million, or $147.2 million, net of cash acquired. UTEC is a global producer of innovative biomanufacturing solutions for cell and gene therapy research, development and commercial manufacturing. UTEC is reported within the Company’s Life Sciences segment. The Company assigned the fair values to the net assets acquired resulting in $95.8 million for goodwill and $52.5 million for intangible assets, the amortization of which is not deductible for tax purposes. The valuation resulted in a deferred tax liability of $13.1 million and a deferred tax asset of $7.0 million. Net working capital was a net liability of $0.9 million, and there were $6.6 million of other non-current assets and $0.7 million of other non-current liabilities. Purchase accounting was finalized in the third quarter of fiscal 2024. Net sales of UTEC were immaterial to the Consolidated Statements of Earnings for the three and nine months ended April 30, 2024.

Isolere Bio, Inc. (Isolere)

In the third quarter of fiscal 2023, the Company acquired Isolere, headquartered in Durham, North Carolina, for cash consideration of $62.4 million, net of cash acquired. Isolere develops reagents and accompanying filtration processes used for the purification and streamlined manufacturing of biopharmaceuticals. Isolere is reported within the Company’s Life Sciences segment. The Company assigned the fair values to the net assets acquired resulting in $28.2 million for goodwill and $44.5 million for intangible assets, the amortization of which is not deductible for tax purposes, resulting in a deferred tax liability of $10.9 million. Net working capital was a net liability of $0.4 million, and there were $1.2 million of other non-current assets and $0.2 million other non-current liabilities. Purchase accounting was finalized in the first quarter of fiscal 2024. Net sales of Isolere were immaterial to the Condensed Consolidated Statements of Earnings for the three and nine months ended April 30, 2024.

Purchase Price Summary

The components of the above acquisitions, net of cash acquired in fiscal 2023, as of each acquisition date were as follows (in millions):

	2023
Intangible assets:
Technology	$	84.9
Trademarks and tradenames	8.2
Customer relationships	1.2
Non-competition agreements	2.7
Intangible assets acquired	97.0
Tangible assets, net	10.4
Assets acquired, net	107.4
Goodwill	124.0
Aggregate purchase price	231.4
Add deferred tax asset	7.0
Less deferred tax liability	(24.0)
Less cash acquired	(4.8)
Acquisitions, net of cash acquired	$	209.6

There have been no material acquisitions in fiscal 2024.

Equity Method Investments

During the third quarter of fiscal 2024, the Company announced it has entered into a definitive agreement allowing the Company to purchase a 49% stake in Medica S.p.A. (Medica). Medica is a leader in hollow fiber membrane filtration technology for medical applications and water purification. Headquartered in Medolla, Italy, the Company has over 700 employees globally and generated €80 million of revenue in calendar 2023. The transaction is subject, among other things, to the acceptance of the tender offer on the ordinary shares of Medica, which was formally announced to the market on April 29, 2024. Upon acceptance of the tender offer, Donaldson would acquire a 49% stake of Medica with the option to acquire the remaining 51% stake in the future.