Acquisitions |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions The Company completed a total of seven business acquisitions in 2017, 2016, and 2015. All of these transactions were accounted for as business combinations. Pro-forma information for these acquisitions is not presented because they are not significant, either individually or in the aggregate. Revenue and earnings since the dates of the acquisitions included in the Company's Consolidated Statements of Operations are also not presented because they are not material. Transaction costs were immaterial and were expensed as incurred. Assets acquired and liabilities assumed have been recorded at their estimated fair values as of the acquisition date. Contingent consideration is remeasured each reporting period with changes in fair value recorded in "Other income (expense)" on the Consolidated Statements of Operations. GVi Ventures, Inc. On April 12, 2017, the Company acquired selected assets and assumed selected liabilities of GVi Ventures, Inc., a privately-held maker of pre-configured vision solutions for common automotive applications based in the United States. The total purchase price of $5,368,000 included cash payment of $4,069,000 and contingent consideration valued at $1,299,000 as of the acquisition date. In addition, the Company entered into special incentive payments tied to employment, none of which are material, that the Company will record as compensation expense. The undiscounted potential outcomes related to the contingent consideration range from $0 to $3,500,000 based upon certain milestone revenue levels over the next five years. In 2017, the Company recorded a $282,000 expense representing a fair value adjustment in other expense, which increased the liability amount to $1,581,000 as of December 31, 2017. Under this transaction, in addition to customer relationships and completed technologies, the Company acquired a team of software engineers that are expected to develop new products and increase the Company's ability to serve large customers in the automotive industry. The purchase price was allocated as follows (in thousands):
ViDi Systems S.A. On April 4, 2017, the Company acquired all of the outstanding shares of ViDi Systems, S.A. (ViDi), a privately-held vision software company based in Switzerland. The total purchase price of $23,015,000 included cash payment of $20,019,000, with the remaining $2,996,000 recorded as a holdback to secure potential claims under the agreement. The holdback limitation period is 18 months from the acquisition date. In addition, the Company entered into a special incentive payment tied to employment, which is not material, that the Company will record as compensation expense. Under this transaction, in addition to completed technologies, the Company acquired a team of software engineers that are expected to help the Company broaden the scope of applications that can be addressed with Cognex vision. ViDi's deep learning software uses artificial intelligence techniques to improve image analysis in applications where it is difficult to predict the full range of image variations that might be encountered. Using feedback, ViDi's software trains the system to distinguish between acceptable variations and defects. The purchase price was allocated as follows (in thousands):
The non-compete agreement and completed technology are included in "Intangible assets" on the Consolidated Balance Sheet. The non-compete agreement will be amortized to research, development and engineering expenses over three years, and the completed technology will be amortized to cost of revenue over six years, both on a straight-line basis. The portion of the acquired goodwill deductible for tax purposes is $5,112,000. Webscan, Inc. On December 9, 2016, the Company acquired selected assets and assumed selected liabilities of Webscan, Inc., a privately-held U.S.-based ID provider of barcode verifiers. The total purchase price of $3,176,000 included $3,000,000 in cash paid upon closing and $176,000 in cash paid in January 2017 as a working capital adjustment. There are no contingent payments. In addition, the Company entered into special incentive payments tied to employment, none of which are material, that the Company will record as compensation expense. Under this transaction, in addition to customer relationships and completed technologies, the Company acquired a team of individuals including software engineers that are expected to help the Company accelerate the development of future ID products. The purchase price was allocated as follows (in thousands):
The customer relationships and completed technologies are included in "Intangible assets" on the Consolidated Balance Sheet. The customer relationships are being amortized to selling, general, and administrative expenses on a straight-line basis over seven years, and the completed technologies are being amortized to cost of revenue on a straight-line basis over five years. The portion of the acquired goodwill deductible for tax purposes is $287,000. Chiaro Technologies LLC On November 30, 2016, the Company acquired selected assets and assumed selected liabilities of Chiaro Technologies LLC, a privately-held U.S.-based 3D vision company. The total purchase price of $4,149,000 included cash payment of $3,538,000 and contingent consideration valued at $611,000 as of the acquisition date. In addition, the Company entered into special incentive payments tied to employment, none of which are material, that the Company will record as compensation expense. The undiscounted potential outcomes related to the contingent consideration range from $0 to $1,250,000 based upon certain milestone revenue levels over the next three years from the acquisition date. In 2017, the Company recorded a $15,000 expense representing a fair value adjustment in other expense, which increased the liability amount to $626,000 as of December 31, 2017. Under this transaction, in addition to completed technologies, the Company acquired a team of software engineers that are expected to help the Company accelerate the development of future 3D vision products. The purchase price was allocated as follows (in thousands):
EnShape GmbH On October 27, 2016, the Company acquired all of the outstanding shares of EnShape GmbH, a privately-held 3D sensor provider based in Germany. The total purchase price of $7,901,000 included $5,395,000 in cash paid upon closing, $1,144,000 of deferred cash payments as a holdback for potential indemnification claims payable in 2018, and $1,362,000 of contingent cash payments based upon the completion of certain tasks by June 30, 2017. These tasks were completed and this payment was made in 2017. In addition, the Company entered into special incentive payments tied to employment, none of which are material, that the Company will record as compensation expense. Under this transaction, in addition to customer relationships and completed technologies, the Company acquired a team of software engineers that are expected to help the Company accelerate the development of future 3D vision products. The purchase price was allocated as follows (in thousands):
The customer relationships and completed technologies are included in "Intangible assets" on the Consolidated Balance Sheet. The customer relationships are being amortized to selling, general, and administrative expenses, and the completed technologies are being amortized to cost of revenue, both on a straight-line basis over seven years. The portion of the acquired goodwill deductible for tax purposes is $328,000. AQSense, S.L. On August 30, 2016, the Company acquired selected assets and assumed selected liabilities of AQSense, S.L., a privately-held 3D vision software provider based in Spain. The total purchase price of $2,519,000 was paid in cash and there are no contingent payments. Under this transaction, in addition to customer relationships and completed technologies, the Company acquired a team of software engineers that are expected to help the Company accelerate the development of future 3D vision products. The purchase price was allocated as follows (in thousands):
The completed technologies are included in "Intangible assets" on the Consolidated Balance Sheet and they are being amortized to cost of revenue on a straight-line basis over five years. The acquired goodwill is not deductible for tax purposes. In the fourth quarter of 2017, the Company determined that the carrying value of the customer relationships was impaired and reduced this value to zero. The impairment charge was included in selling, general, and administrative expenses on the Consolidated Statements of Operations. Manatee Works, Inc. On August 21, 2015, the Company acquired selected assets of Manatee Works, Inc. (Manatee), a privately-held U.S.-based developer of barcode scanning software development kits (SDKs). The Company plans to leverage Manatee's current developer network and business model of attracting new developers to drive leads for its ID products. Under this transaction, the Company also acquired technology for use in mobile devices. The total purchase price of $4,813,000 included $1,023,000 in cash paid upon closing and contingent consideration valued at $3,790,000 on the acquisition date. In 2015, the Company recorded a $790,000 benefit in other income, which reduced the liability amount to $3,000,000. In 2016, the Company paid $337,000 and recorded a $463,000 benefit in other income, which reduced the liability amount to $2,200,000. In 2017, the Company paid $525,000 and recorded a $325,000 benefit in other income, which reduced the liability amount to $1,350,000 as of December 31, 2017. The undiscounted potential outcomes related to future contingent consideration range from $0 to approximately $2,200,000 in 2018 based upon reaching certain milestone revenue levels. The purchase price was allocated as follows (in thousands):
The customer relationships and completed technologies are included in "Intangible assets" on the Consolidated Balance Sheets. The customer relationships are being amortized to selling, general, and administrative expenses, and the completed technologies are being amortized to cost of revenue, both on a straight-line basis over five years. The portion of the acquired goodwill deductible for tax purposes is $366,000. |