Acquisition

12 Months Ended

Mar. 26, 2021

On August 28, 2020, the Company closed on its purchase of Voxtel, Inc. (“Voxtel”), a privately-held technology company located in Beaverton, Oregon that develops, manufactures and supplies photonic and advanced 3D imaging technologies (the “Acquisition”). The total preliminary purchase price was $34,980, including certain earn-outs that have a potential payout of $15,000. The fair value of these earn-outs at acquisition date was $7,300.

The Acquisition has been accounted for as a business combination and, in accordance with ASC 805, Business Combinations, the Company has recorded the assets acquired and liabilities assumed at their respective fair values as of the date of the Acquisition. The allocation of purchase consideration to assets and liabilities is not yet finalized. The preliminary allocation of the purchase price was based upon a preliminary valuation, and the Company’s estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). The primary areas of the preliminary purchase price allocation that are not yet finalized are the determination of the tax basis of certain assets and liabilities, the determination of certain tax carry forwards, and residual goodwill. The preliminary fair values of the assets acquired and liabilities assumed by major class of the acquisition of Voxtel were recognized as follows:


Estimated fair value of consideration:
Base purchase price	$	27,680
Contingent consideration	7,300
Total estimated fair value of consideration	$	34,980
Estimated fair value of assets acquired and liabilities assumed:
Net working capital	$	4,064
Property and equipment	57
Finite-life intangible assets	13,600
Indefinite-life intangible assets	2,400
Deferred tax liability	(3,843)
Goodwill	18,702
Allocated purchase price	$	34,980

The significant intangible assets identified in the preliminary purchase price allocation discussed above include completed technology, in-process research and development, customer relationships and trademarks. Completed technology, customer relationships and trademarks are amortized over their respective useful lives on a straight-line basis. An estimated fair value of $2,400 was assigned to acquired in-process research and development costs with an indefinite life.

Amortization of completed technology is included within cost of goods sold, and amortization of customer relationships and trademarks is included within selling, general and administrative expense. To value the completed technology and the in-process research and development assets, the Company utilized the income approach, specifically a discounted cash flow method known as the multi-period excess earnings method. Customer relationships represent the underlying relationships with certain customers to provide ongoing services for products sold. The Company utilized the income approach, specifically the distribution method, a subset of the excess-earnings method, to value the customer relationships and trademarks.

The following table presents the estimated fair values and useful lives of the identifiable finite-life intangible assets acquired:


	Useful Life	Fair value
Completed technology	12 years	$	13,100
Customer relationships	6 years	300
Trademarks	5 years	200
		$	13,600

Goodwill was recognized as the excess purchase price over the fair value of the net assets acquired. The goodwill reflects the value of the synergies the Company expects to realize and the assembled workforce. Goodwill from the Acquisition is included within the Company’s one reporting unit and is included in the Company’s enterprise-level annual review for impairment. Goodwill resulting from the Acquisition is not deductible for tax purposes.

The revenues were $1,235 and loss of $4,998 before income taxes from the Acquisition to the Company’s consolidated results for the year ended March 26, 2021. The Company has not presented pro forma results of operations for the Acquisition because it is not material to the Company's consolidated results of operations, financial position, or cash flows.