3. Acquisition and Divestiture

Acquisition

On April 1, 2011, the Company acquired all of the outstanding stock of RTS Life Science Limited (“RTS”), a privately held company, for $3.4 million, net of cash acquired. RTS is a provider of automation solutions to the life sciences market, located in Manchester, United Kingdom. The acquisition provides the Company with initial access to the life sciences market, specifically biobanking and compound sample management, and the ability to leverage the Company’s existing automation technologies with those of RTS.

The assets and liabilities of RTS were recorded at their fair values as of the acquisition date as follows (in thousands):


Accounts receivable	$	3,156
Inventory		1,668
Other current assets		1,008
Property, plant and equipment		860
Completed technology		1,524
Customer relationships		577
Trademarks and trade names		64
Goodwill		3,556
Accounts payable		(1,397	)
Deferred revenue		(5,232	)
Current liabilities		(2,403	)

Total purchase price, net of cash acquired	$	3,381

The purchase price allocation is preliminary and subject to revision for amounts that are not expected to be material. The completed technology will be amortized to cost of revenue over its estimated useful life of 5 to 7 years, the customer relationships will be amortized to operating expense over 7 years and the trademarks and trade names will be amortized to operating expense over 3 years. Goodwill arising from the acquisition will not be deductible for tax purposes.

RTS’s operating results have been included in the Company’s results of operations from the acquisition date, and were not material. Pro forma results are not provided as RTS’s results of operations were not material. Transaction costs related to this acquisition were $188,000 for the nine months ended June 30, 2011, and are included in selling, general and administrative expense.

Divestiture

On April 20, 2011, the Company entered into an agreement with affiliates of Celestica Inc. (the “Buyers”) to sell the assets of its extended factory contract manufacturing business (the “Business”). The Buyers also agreed to assume certain liabilities related to the Business (the “Asset Sale”). The Asset Sale was completed on June 28, 2011 (the “Closing”). At the Closing, the Buyers paid the Company a total purchase price of $78.0 million in cash, plus $1.3 million as consideration for cash acquired in the Asset Sale. An additional estimated $2.5 million of proceeds is expected to be paid during our fourth quarter of 2011, which represents a working capital normalizing adjustment. The Company paid $2.3 million of transaction expenses. During the three months ended June 30, 2011, the Company recorded a gain on this sale of $45.0 million, before income taxes. Income taxes directly attributable to this gain of $2.4 million were also recorded during the three months ended June 30, 2011.

In connection with the Asset Sale, all trade accounts receivable related to the Business were sold to the Buyers as of the Closing. The Company received $4.4 million of payments on these receivable after the Closing and up through June 30, 2011. These funds will be remitted to be Buyer during the three months ended September 30, 2011. The Company expects that this practice will continue as each customer transitions trade payments to the Buyers. The unaudited Consolidated Statements of Cash Flows reflect the $4.4 million of receipts as proceeds from assets sold within cash flows from investing activities.

The Company and the Buyers also entered into certain commercial supply and license agreements at the Closing which will govern the ongoing relationship between the Buyers and the Company going forward. Pursuant to those agreements, the Company will supply the Buyers with certain products and has licensed certain intellectual property needed to run the Business and the Buyers will supply certain products to the Company. Due to the significance of these ongoing commercial arrangements, the sale did not qualify for discontinued operations treatment. Therefore, historical financial results of the divested business will not be segregated in the Company’s consolidated financial statements for the historical periods in which this business was part of the Company.