Business Acquisitions

6 Months Ended

Jul. 03, 2021

Business Combination and Asset Acquisition [Abstract]

Business Acquisitions

Business Acquisitions

Adaptive Vision

On May 17, 2021, the Company acquired Adaptive Vision Sp. z o.o. (“Adaptive Vision”), a provider of graphical machine vision software with applications in the manufacturing industry, as well as a provider of libraries and other offerings for machine vision developers. The Company’s cash purchase consideration of $18 million, net of cash on-hand, was primarily allocated to technology-related intangible assets of $13 million and associated deferred tax liabilities, and goodwill of $7 million. The technology-related intangible assets have an estimated useful life of 8 years. The acquisition was accounted for under the acquisition method of accounting for business combinations. While we believe these estimates provide a reasonable basis to record the net assets acquired, the purchase price allocation is considered preliminary and subject to adjustment during the measurement period, which is up to one year from the acquisition date. The goodwill, which will be non-deductible for tax purposes, has been allocated to the EVM segment and principally relates to the planned expansion of the Adaptive Vision technologies into new product offerings and markets.

Reflexis

During the second quarter of 2021, the Company recorded measurement period adjustments related to its September 1, 2020 acquisition of Reflexis Systems, Inc. (“Reflexis”). The primary measurement period adjustments included a $9 million increase to the trade name intangible assets and a $4 million increase to deferred tax liabilities. These adjustments, relating to facts and circumstances existing as of the acquisition date, resulted in a $5 million reduction of goodwill. The fair value estimates still considered preliminary as of July 3, 2021 primarily relate to income tax items.

Additionally, during the second quarter of 2021, the Company received escrow proceeds of $1 million related to resolution of contractual items resulting from the Reflexis acquisition. These proceeds were reflected as a reduction in purchase price with a corresponding decrease of goodwill.

Fetch Robotics

On June 30, 2021, the Company entered into a definitive agreement to acquire Fetch Robotics, Inc. (“Fetch”), a provider of autonomous mobile robots for customers in the manufacturing and warehousing markets. The aggregate purchase consideration, inclusive of the fair value of the Company’s existing minority ownership interest in Fetch, is expected to be approximately $305 million, subject to customary adjustments. Zebra expects to fund the transaction primarily with cash on hand. The transaction is subject to customary closing conditions and is expected to close in the third quarter of 2021. The acquired business will become part of the EVM segment.

Acquisition and integration costs

We incurred approximately $4 million of acquisition-related costs, primarily related to third-party transaction and advisory fees, in the second quarter of 2021 associated with our business acquisitions. These costs are included within Acquisition and integration costs on the Consolidated Statements of Operations.