Business Combinations

9 Months Ended

Jun. 30, 2011

Business Combinations

Business Combinations

(2)        Business Combinations

During the first nine months of fiscal 2011, the Company established an unconsolidated joint venture in Turkey and completed the acquisition of two diagnostics physics practices, none of which were individually, or in the aggregate, material to the Company's consolidated financial statements.

Acquisition of Global Physics Solutions, Inc.

On November 9, 2009, Landauer, Inc. completed the acquisition of all of the issued and outstanding capital stock of Global Physics Solutions, Inc. ("GPS") for $22,000. GPS is a nationwide service provider of clinical physics support, equipment commissioning and accreditation support, and imaging equipment testing. The Company completed the acquisition of GPS as a platform to expand into the medical physics services market and reports the operating results of GPS in the Medical Physics reporting segment.

The consideration transferred included amounts applied by Landauer at the closing to repay all of the outstanding indebtedness of GPS. Landauer also deposited $1,000 of the consideration transferred into an escrow account to be held for a period of 18 months and applied to the settlement of the GPS stockholders' indemnification obligations, if any, in connection with the transaction. The escrow was released in May 2011. The Company funded the consideration transferred through a combination of borrowings under its credit agreement and cash on hand.

The following table summarizes the $22,000 of consideration transferred to acquire GPS and the assets acquired and liabilities assumed based on their fair values as of the date of the acquisition.

Current assets	$	804
Property, plant and equipment		1,040
Intangible assets		5,300
Goodwill		17,380
Current liabilities		(918)
Other long-term liabilities		(250)
Long-term deferred taxes, net		(1,356)
Total assets acquired and liabilities assumed	$	22,000

The excess of the consideration transferred over the fair value of the net tangible and intangible assets acquired resulted in goodwill of $17,380, which is attributable primarily to the value of the acquired assembled workforce and GPS' position as a leading provider in a large fragmented growth market. The goodwill has been assigned to the Medical Physics reporting segment. The Company will deduct $4,253 for income tax purposes. The Company acquired a tradename in the amount of $900 which has an indefinite life, and $4,400 of customer relationships which are being amortized over 15 years.

The acquired business's revenues of $9,373 and net loss of $433 were recognized in the Company's consolidated financial statements for the period from November 1, 2009 to June 30, 2010. The revenues and results of operations of GPS from November 1 to the date of acquisition, November 9, were not material to the consolidated financial statements.

Other Acquisitions

During fiscal 2010, the Company completed the following acquisitions which are presented in the aggregate as they were not individually material to the Company's consolidated financial statements.

On November 2, 2009, Landauer completed the acquisition of all issued and outstanding capital stock of Gammadata Mätteknik AB ("GDM"), a Swedish provider of radon measurement services. GDM is based near Stockholm, Sweden and provides measurement services throughout the Scandinavian region and Europe. The consideration transferred for GDM was $6,603. On October 2, 2009, Landauer acquired the assets of a dosimetry service provider in Sweden, now called Landauer Persondosimetri AB ("PDM"). The consideration transferred for PDM was $1,085. These acquisitions are consistent with the Company's strategy to expand into new international markets, primarily by investing in or acquiring existing radiation monitoring service providers with a prominent local presence. These acquisitions are reported in the Radiation Monitoring reporting segment.

On June 1, 2010, Landauer acquired certain assets of Upstate Medical Physics, Inc. ("UMP"), a New York company providing imaging medical physics services, for consideration transferred of $2,231. This acquisition is aligned with the Company's strategy to expand into the medical physics services market and is reported in the Medical Physics reporting segment.

The aggregate consideration transferred and the identifiable assets acquired and liabilities assumed based on their fair values as of the date of the GDM, PDM and UMP acquisitions were as follows:

Current assets	$	2,088
Property, plant and equipment		606
Intangible assets		1,389
Goodwill		8,130
Current liabilities		(2,157)
Other long-term liabilities		(137)
Total assets acquired and liabilities assumed	$	9,919

The excess of the consideration transferred over the fair value of the net tangible and intangible assets acquired resulted in goodwill for these acquisitions of $8,130, of which $6,798 and $1,332 has been assigned to the Radiation Monitoring segment and the Medical Physics segment, respectively. The Company expects to deduct approximately $1,717 of goodwill for income tax purposes. The Company acquired customer lists, the fair value of which was determined to be $1,389, which are being amortized over 15 years.

The acquired businesses contributed revenues of $3,909 and earnings of $965 to the Company for the period from their respective dates of acquisition to June 30, 2010.

Unaudited Proforma Results

The following unaudited proforma summary presents consolidated information of the Company as if these business combinations had occurred as of October 1, 2009.

	Nine months ended June 30, 2010
	Landauer, Inc. Actual		Landauer, Inc. Proforma
Revenues	$	85,295	$	90,124
Net income attributed to Landauer, Inc.		19,118		20,221

The proforma results for the nine months ended June 30, 2010 include: estimated interest expense in connection with debt financing of the acquisitions; elimination of pretax acquisition and reorganization costs of $1,683; the estimated amortization of intangibles; and the income tax impact of these adjustments. The unaudited proforma information is not necessarily indicative of the results of operations that would have been achieved if the acquisitions had been effective as of the beginning of the period presented.