Business Acquisitions

12 Months Ended

Dec. 31, 2023

Business Combinations

Moritex Corporation

On October 18, 2023, the Company acquired all the outstanding shares of Moritex Corporation (Moritex), a global provider of premium optical components based in Japan, for an enterprise value of ¥40 billion Japanese Yen, or approximately $270 million U.S. Dollars based on the closing date foreign exchange rate.

The cash-free, debt-free enterprise value was adjusted by cash acquired, debt assumed, and final working capital balances to arrive at total consideration to be allocated to assets acquired and liabilities assumed of ¥44,376,245,000 ($296,138,000 based on the closing date foreign exchange rate), of which ¥44,227,414,000 ($295,144,000) was paid in cash on the closing date and ¥148,831,000 ($994,000) is expected to be paid in the first quarter of 2024 as a final purchase price adjustment based on the closing balance sheet. The Company acquired cash balances totaling $38,088,000 as part of this transaction, to arrive at a net cash outflow of $257,056,000 on the closing date. There was no contingent consideration as part of this transaction.

Established in 1973, Moritex develops, manufactures, and sells high-end optical components, such as lenses and lighting, for industrial use. The acquisition of Moritex is expected to increase the Company's optical technology capabilities, which include our proprietary embedded liquid lenses and, more recently, computational lighting from our 2022 acquisition of SAC Sirius Advanced Cybernetics GmbH (described below). Vision technology relies on acquiring high-quality images to optimize the performance of machine vision tools. Historically, our customers have primarily used third-party lenses and lighting for image acquisition. We anticipate the portfolio of Moritex optical components will allow us to expand our served market to include high-end lenses and lighting and provide our customers with a more complete product offering by replacing third-party components with Cognex-manufactured optical components. Moritex also provides the Company with a more substantial presence in Japan, which is an important machine vision market where we believe we can increase our share through a stronger local presence.

This transaction was accounted for as a business combination. As of the date of this filing, the purchase price allocation is preliminary and may change during the one-year measurement period ending October 18, 2024 as new

information becomes available, particularly related to tax positions reflected as of the acquisition date. Identifiable assets acquired and liabilities assumed were recorded at their estimated fair values, which were valued using level 3 inputs, as of the acquisition date. Pro-forma information, as well as revenue and earnings from the date of the acquisition, are not presented because they are not material to the Company’s consolidated financial statements. Transaction costs were approximately $5,800,000 and were expensed as incurred as part of SG&A expenses on the Consolidated Statement of Operations.

The purchase price was allocated based on provisional amounts as follows (in thousands):


Cash and cash equivalents	$	38,088
Accounts receivable	11,572
Inventories	22,788
Property, plant and equipment	19,876
Goodwill	145,047
Customer relationships	66,900
Completed technologies	32,300
Trademarks	850
Deferred income tax assets	4,516
Other assets	4,935
Accounts payable	(6,700)
Accrued expenses	(13,521)
Deferred income tax liabilities	(22,055)
Reserve for income taxes	(5,864)
Other liabilities	(2,594)
Purchase price	$	296,138

The customer relationships, completed technologies, and trademarks are included in "Intangible assets" on the Consolidated Balance Sheet. The customer relationships are being amortized to SG&A expenses over fifteen years, the completed technologies are being amortized to cost of revenue over nine years, and the trademarks are being amortized to SG&A expenses over three years. None of the acquired goodwill is deductible for tax purposes.

SAC Sirius Advanced Cybernetics GmbH

On December 7, 2022, the Company acquired all of the outstanding shares of SAC Sirius Advanced Cybernetics GmbH ("SAC"), a leader in computational lighting technology based in Germany. The acquisition of SAC and its technology is expected to expand the Company’s capabilities in defect detection, and accelerate its growth trajectory with electric vehicle battery manufacturers. The purchase price of the acquisition was not material to the Company's consolidated financial statements.