Goodwill and Intangible Assets

12 Months Ended

Sep. 30, 2012

7. Goodwill and Intangible Assets

The Company performs an annual impairment test of its goodwill on September 30 of each fiscal year unless interim indicators of impairment exist. Goodwill is considered to be impaired when the net book value of a reporting unit exceeds its estimated fair value. Fair values are estimated using a discounted cash flow methodology. Discounted cash flows are based on the businesses’ strategic plans and management’s best estimate of revenue growth and gross profit by each reporting unit. The Company performed its goodwill impairment test as of September 30, 2012 and 2011, and determined that no adjustment to goodwill was necessary.

The Company completed its annual goodwill impairment test by reporting unit as of September 30, 2012 and determined that the estimated fair value of each reporting unit exceeded its carrying value and no impairment existed. The discount rate used in the DCF analysis for the Brooks Life Science Systems operating segment was 18.5%. The revenue multiple used in the terminal value calculation for the Brooks Life Science Systems operating segment was 1.9x, and is consistent with revenue multiples of peers in the life science industry. The final terminal value calculation for this reporting unit reflects an equal weighting of a revenue multiple and capitalizing cash flow from the terminal year, which is consistent with the approach used by the Company in the prior year. The Company acquired the businesses comprising the Brooks Life Science Systems operating segment at various dates over the last eighteen months. While the Company believes its assumptions are reasonable, actual results could differ from its projections. To the extent projected results of cash flows are revised downward, the reporting unit may be required to write down all or a portion of its goodwill, which would adversely impact the Company’s earnings.

The components of the Company’s goodwill by business segment at September 30, 2012 and 2011 are as follows (in thousands):


	Brooks Product Solutions			Brooks Global Services			Brooks Life Science Systems		Contract Manufacturing			Other			Total
Gross goodwill at September 30, 2010	$	485,844		$	151,238		$	—	$	18,593		$	7,421		$	663,096
Acquisitions and adjustments during fiscal 2011		—			—			36,589		—			—			36,589

Gross goodwill at September 30, 2011		485,844			151,238			36,589		18,593			7,421			699,685
Acquisitions and adjustments during fiscal 2012		—			—			3,713		—			—			3,713

Gross goodwill at September 30, 2012	$	485,844		$	151,238		$	40,302	$	18,593		$	7,421		$	703,398

Accumulated goodwill impairments at September 30, 2010	$	(437,706	)	$	(151,238	)	$	—	$	(18,593	)	$	(7,421	)	$	(614,958	)
Impairments recorded during fiscal 2011		—			—			—		—			—			—

Accumulated goodwill impairments at September 30, 2011		(437,706	)		(151,238	)		—		(18,593	)		(7,421	)		(614,958	)
Impairments recorded during fiscal 2012		—			—			—		—			—			—

Accumulated goodwill impairments at September 30, 2012	$	(437,706	)	$	(151,238	)	$	—	$	(18,593	)	$	(7,421	)	$	(614,958	)

Goodwill, less accumulated impairments at September 30, 2011	$	48,138		$	—		$	36,589	$	—		$	—		$	84,727

Goodwill, less accumulated impairments at September 30, 2012	$	48,138		$	—		$	40,302	$	—		$	—		$	88,440

Components of the Company’s identifiable intangible assets are as follows (in thousands):


	September 30, 2012						September 30, 2011
	Cost		Accumulated Amortization		Net Book Value		Cost		Accumulated Amortization		Net Book Value
Patents	$	7,808	$	7,093	$	715	$	7,808	$	6,989	$	819
Completed technology		54,583		42,751		11,832		50,975		39,235		11,740
Trademarks and trade names		4,014		3,880		134		3,941		3,719		222
Customer relationships		48,654		21,935		26,719		49,029		17,496		31,533

	$	115,059	$	75,659	$	39,400	$	111,753	$	67,439	$	44,314

In connection with the acquisition of Celigo during fiscal year 2012, the Company allocated a portion of the purchase price to the following intangible assets: Completed Technology — $3.5 million and Trademarks and Trade Names — $0.1 million. For details regarding these intangible assets see Note 3. These intangible assets support the products and services provided by the Brooks Life Science Systems segment.

In connection with the acquisitions of Nexus and RTS during fiscal year 2011, the Company allocated a portion of the purchase price to the following intangible assets: Completed Technology — $7.5 million, Customer Relationships — $31.6 million and Trademarks and Trade Names — $0.2 million. For details regarding these intangible assets see Note 3. These intangible assets support the products and services provided by the Brooks Life Science Systems segment.

Amortization expense for intangible assets was $8.2 million, $4.6 million and $3.9 million for the years ended September 30, 2012, 2011 and 2010, respectively.

Estimated future amortization expense for the intangible assets recorded by the Company as of September 30, 2012 is as follows (in millions):


Year ended September 30,
2013	$	6.5
2014		5.8
2015		5.7
2016		5.1
2017		4.5
Thereafter		11.8

	$	39.4

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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