BUSINESS AND ASSET ACQUISITIONS

6 Months Ended

Sep. 28, 2012

BUSINESS AND ASSET ACQUISITIONS

BUSINESS AND ASSET ACQUISITIONS

10. BUSINESS AND ASSET ACQUISITIONS

Business Acquisitions

During the six-month period ended September 28, 2012, the Company completed three 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 $72.3 million. The total amount of cash acquired from these acquisitions amounted to $80.1 million, resulting in net cash of $7.8 million acquired from these acquisitions during the six-month period ended September 28, 2012. 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 $68.3 million in connection with these acquisitions.

In connection with one of the acquisitions during the first fiscal quarter of 2013, 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.  The Company can settle the obligation related to these assets by returning the respective assets to the customer and will not be required to pay cash by either the customer or the third party banking institution to settle the obligation.  Accordingly, these assets amounting to $224.3 million and the liability amounting to $197.5 million have been included in other current assets and other current liabilities, respectively as of September 28, 2012.  The cash flows relating to the purchase of assets by the Company on behalf of the customer amounting to $59.1 million has been included in other investing cash flows for the six month period ended September 28, 2012.  Net cash inflows amounting to $31.3 million relating to the funding of these assets by the customer has been included as other financing activities cash flows during the six month period ended September 28, 2012.  In conjunction with this acquisition, the Company is amending its current manufacturing services agreement with the customer to include a license agreement for exclusive manufacturing rights and access to certain manufacturing technologies and processes.  In consideration for this license, the Company is obligated to pay the customer $88.0 million representing the estimated fair value of the license.  The obligation will be reduced over the term of the service arrangement as product is manufactured on behalf of the customer, and if a certain minimum number of products are manufactured over the term of the customer arrangement the $88.0 million obligation will be fully satisfied.

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 but at that time was unknown to the Company, 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 six-month period ended September 28, 2012 is primarily related to expected synergies. The goodwill is not deductible for income tax purposes.

The condensed consolidated financial statements include the operating results of each business combination from the date of acquisition. Pro forma results of operations for the acquisitions completed during the six-month period ended September 28, 2012 have not been presented because the effects of the acquisitions, individually and in the aggregate, were not material to the Company’s financial results.