BUSINESS AND ASSET ACQUISITIONS

12 Months Ended

Mar. 31, 2013

BUSINESS AND ASSET ACQUISITIONS

BUSINESS AND ASSET ACQUISITIONS

15. BUSINESS AND ASSET ACQUISITIONS

• Business Acquisitions

        The business and asset acquisitions described below were accounted for using the purchase method of accounting, and accordingly, the fair value of the net assets acquired and the results of the acquired businesses were included in the Company's consolidated financial statements from the acquisition dates forward. The Company has not finalized the allocation of the consideration for certain of its recently completed acquisitions and expects to complete these allocations within one year of the respective acquisition dates.

Fiscal 2013 business acquisitions

Acquisition of Saturn Electronics and Engineering Inc.

        During fiscal year 2013, the Company completed its acquisition of all outstanding common stock of Saturn Electronics and Engineering, Inc. ("Saturn"), a supplier of electronics manufacturing services, solenoids and wiring for the automotive, appliance, consumer, energy and industrial markets. The acquisition of Saturn broadened the Company's service offering and strengthened its capabilities in the automotive and consumer electronics businesses. The results of operations were included in the Company's consolidated financial results beginning on the date of acquisition which amounted to approximately $100.9 million in revenue for the year ended March 31, 2013. Net income during fiscal year ended March 31, 2013 was not significant to the consolidated operating results of the Company.

        The initial cash consideration for this acquisition amounted to $193.7 million with up to an additional $15.0 million of estimated potential contingent consideration, for a total purchase consideration of $208.7 million.

        The allocation of the purchase price to Saturn's tangible and identifiable intangible assets acquired and liabilities assumed was based on their estimated fair values as of the date of acquisition. Management determined the value of acquired intangible assets with the assistance of a third-party appraisal firm. Management is in the process of determining the fair value amounts for certain other assets and liabilities that were acquired. The excess of the purchase price over the tangible and identifiable intangible assets acquired and liabilities assumed has been allocated to goodwill.

        The following represents the Company's allocation of the total purchase price to the acquired assets and liabilities assumed of Saturn (in thousands):

Current assets:
Cash and cash equivalents	$	2,191
Accounts receivable		44,879
Inventories		23,350
Other current assets		619
Total current assets		71,039
Property and equipment		43,227
Goodwill		98,746
Other intangible assets		57,200
Other assets		925
Total assets	$	271,137
Current liabilities:
Accounts payable	$	29,616
Other current liabilities		9,429
Total current liabilities		39,045
Other liabilities		23,401
Total aggregate purchase price	$	208,691

        Intangible assets of $57.2 million in connection with the Saturn acquisition is comprised of customer-related intangible assets of $46.4 million and other intangible assets consisting of developed technology amounting to $10.8 million. Customer relationships are amortized over an estimated useful life of 5 years and developed technology is amortized over an estimated useful life of 7 years.

        The above purchase price allocation includes certain purchase accounting adjustments recorded in the fourth quarter of fiscal 2013, which resulted in a net decrease of $7.5 million to goodwill with corresponding increases to intangible assets amounting to $32.5 million and other liabilities amounting to $23.0 million. The increase in intangible assets was as a result of the finalization of the valuation for acquired intangible assets and the increase to other liabilities is primarily as a result of deferred tax liabilities recorded relating to intangible assets. As a result of this deferred tax liability, the Company released an amount of $22.3 million relating to valuation allowances for deferred tax assets in the fourth quarter of fiscal 2013, and this amount is included in the provision for income taxes for the year ended March 31, 2013. In accordance with the accounting guidance applicable to business combinations, the Company has re-casted the operating results for the quarter ended December 31, 2012 to reflect the release of the valuation allowance for deferred tax assets. Refer to note 20 to the consolidated financial statements for further details.

• Other business acquisitions

        Additionally, during the fiscal year ended March 31, 2013, the Company completed three other acquisitions that were not individually, nor in the aggregate, significant to the Company's consolidated financial position, results of operations and cash flows. The total consideration, which was paid in cash for these acquisitions, and earn outs related to certain prior period acquisitions amounted to $72.7 million. The total amount of cash acquired from these acquisitions amounted to $80.1 million, resulting in net cash of $7.4 million acquired for these acquisitions during the fiscal year ended 2013. One of the acquired businesses expanded the Company's capabilities primarily in the medical and defense markets; another acquired business will support the hardware product manufacturing needs of an existing customer in the technology industry; and the other acquired business will expand the Company's capabilities primarily in the LED design and manufacturing market. The Company primarily acquired cash, inventory and certain other manufacturing assets, and recorded goodwill of $61.9 million in connection with these acquisitions. The potential amount of future payments which the Company could be required to make under contingent consideration arrangements relating to these acquisitions is not material. The aggregate results of operations for these acquisitions were included in the Company's consolidated financial results beginning on the date of acquisition which amounted to approximately $231.3 million in revenue for the year ended March 31, 2013. Net income during fiscal year ended March 31, 2013 was not significant, individually or in the aggregate, to the consolidated operating results of the Company.

        In connection with one of the acquisitions, the Company acquired certain manufacturing assets that were purchased by the acquired company on behalf of an existing customer and will be continued to be used exclusively for the benefit of this customer. These assets are financed by a third party banking institution acting as an agent of the customer under an agreement, the terms of which reset annually. While the Company has the option to settle this obligation in cash, the Company can also settle the obligation related to these assets by returning the respective assets to the customer and cannot be required to pay cash by either the customer or the third party banking institution to settle the obligation. Accordingly, these assets amounting to $251.3 million and the liability amounting to $272.8 million have been included in other current assets and other current liabilities, respectively as of March 31, 2013. The cash flows relating to the purchase of assets by the Company on behalf of the customer amounting to $115.3 million have been included in other investing cash flows for the fiscal year ended March 31, 2013. Net cash inflows amounting to $101.9 million relating to the funding of these assets by the financial institution on behalf of the customer have been included in cash flows from other financing activities during the fiscal year ended March 31, 2013. In conjunction with this acquisition, the Company amended its existing manufacturing agreement with the customer. As part of this agreement, the Company is obligated to reimburse the customer for any shortfall in production if the manufacturing contract is terminated prior to the delivery of a minimum volume of units to be manufactured over the term of the contract. The total commitment under this arrangement amounted to $88.0 million and declines over time as the Company continues to manufacture and deliver products under the arrangement. Payment of this guarantee is not probable as of March 31, 2013.

        The Company continues to evaluate certain assets and liabilities related to business combinations completed during the recent periods. Additional information, which existed as of the acquisition date, may become known to the Company during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. Changes to amounts recorded as assets or liabilities may result in a corresponding adjustment to goodwill.

        The goodwill generated from the Company's business combinations completed during the fiscal year ended March 31, 2013 is primarily related to value placed on the employee workforce, service offerings and capabilities, and expected synergies. The goodwill is not deductible for income tax purposes.

• Fiscal 2012 business acquisitions

        During fiscal year 2012, the Company completed three acquisitions that were not individually, nor in the aggregate significant to the Company's financial position, results of operations and cash flows. The aggregate cash paid for these acquisitions together with cash paid for contingent consideration related to certain prior period acquisitions during the year ended March 31, 2012 totaled approximately $92.3 million, net of cash acquired. The acquired businesses expanded the Company's capabilities in the communications market. The Company primarily acquired inventory and certain other manufacturing assets and recorded goodwill of $8.6 million and customer contract intangibles of $3.9 million in connection with the acquisitions.

• Fiscal 2011 business acquisitions

        During fiscal year 2011, the Company completed four acquisitions that were not individually, nor in the aggregate significant to the Company's financial position, results of operations and cash flows. The aggregate cash paid for these acquisitions together with cash paid for contingent consideration relating to certain prior period acquisitions during the year ended March 31, 2011 totaled approximately $17.0 million, net of cash acquired. The acquired businesses expanded the Company's capabilities in the medical and infrastructure business groups.

        The consolidated financial statements include the operating results of each business combination from the date of acquisition and the related transaction costs incurred which are not material. Pro forma results of operations for the acquisitions completed have not been presented because the effects of the acquisitions, individually and in the aggregate, were not material to the Company's financial results.

        On April 16, 2013, the Company completed its acquisition of certain manufacturing operations from Google's Motorola Mobility LLC, including a manufacturing and services agreement with mobile devices. The total purchase consideration for this acquisition amounted to $170.6 million. The Company primarily acquired inventory and fixed assets in connection with this acquisition. The financial results of this acquisition are not included in the consolidated financial statements for any period presented. A preliminary purchase price allocation is not yet available for this acquisition.