D. ACQUISITIONS

Mobile Industrial Robots

On April 25, 2018, Teradyne acquired all the issued and outstanding shares of Mobile Industrial Robots ApS (“MiR”), a Danish limited liability company located in Odense, Denmark. MiR is the leading maker of collaborative autonomous mobile robots for industrial applications. MiR is part of Teradyne’s Industrial Automation segment.

The total preliminary purchase price of $196.6 million consisted of $145.2 million of cash paid and $51.4 million of contingent consideration, measured at fair value. The contingent consideration is payable in Euros upon the achievement of certain thresholds and targets for revenue and earnings before interest and taxes for periods from January 1, 2018 to December 31, 2018; January 1, 2018 to December 31, 2019; and January 1, 2018 to December 31, 2020. At July 1, 2018, the maximum amount of contingent consideration that could be paid is $117 million.

The valuation of the contingent consideration utilized the following assumptions: (1) probability of meeting each target; (2) expected timing of meeting each target; and (3) discount rate reflecting the risk associated with the expected payments. The probabilities and timing for each target were estimated based on a review of the historical and projected results. A significant portion of the risk in achieving the contingent consideration was captured in the probabilities assigned to meeting each target.

The MiR acquisition was accounted for as a business combination and, accordingly, the results have been included in Teradyne’s consolidated results of operations from the date of acquisition. The allocation of the preliminary total purchase price to MiR’s net tangible liabilities and identifiable intangible assets was based on their estimated fair values as of the acquisition date. The excess of the purchase price over the identifiable intangible assets and net tangible liabilities in the amount of $135.7 million was allocated to goodwill, which is not deductible for tax purposes. The purchase price and purchase price allocation are preliminary pending the final determination of the fair value of contingent consideration, acquired assets and assumed liabilities. MiR’s results have been included in Teradyne’s Industrial Automation segment from the date of acquisition.

The following table represents the preliminary allocation of the preliminary purchase price:


	Purchase Price Allocation
	(in thousands)
Goodwill	$	135,747
Intangible assets		79,660
Tangible assets acquired and liabilities assumed:
Current assets		6,039
Non-current assets		299
Accounts payable and current liabilities		(7,336	)
Long-term deferred tax liabilities		(17,779	)

Total purchase price	$	196,630

Teradyne estimated the fair value of intangible assets using the income and cost approaches. Acquired intangible assets are amortized on a straight-line basis over their estimated useful lives. Components of these intangible assets and their estimated useful lives at the acquisition date are as follows:


	Fair Value		Estimated Useful Life
	(in thousands)		(in years)
Developed technology	$	63,820		7.0
Trademarks and tradenames		12,060		11.0
Customer relationships		3,770		2.5
Backlog		10		0.2

Total intangible assets	$	79,660		7.4

For the period from April 25, 2018 to July 1, 2018, MiR contributed $4.5 million of revenues and had a $(1.5) million loss from operations before income taxes.

The following unaudited pro forma information gives effect to the acquisition of MiR as if the acquisition occurred on January 1, 2017. The unaudited pro forma results are not necessarily indicative of what actually would have occurred had the acquisition been in effect for the periods presented:


	For the Three Months Ended				For the Six Months Ended
	July 1, 2018		July 2, 2017		July 1, 2018		July 2, 2017
	(in thousands)
Revenue	$	528,238	$	699,790	$	1,021,194	$	1,158,228
Net income		101,780		172,238		186,787		251,728
Net income per common share:
Basic	$	0.53	$	0.87	$	0.97	$	1.26

Diluted	$	0.52	$	0.85	$	0.94	$	1.25

Pro forma results for the three and six months ended July 1, 2018 were adjusted to exclude $2.3 million and $2.9 million, respectively, of acquisition related costs, and $0.4 million of non-recurring expense related to fair value adjustment to acquisition-date inventory.

Pro forma results for the six months ended July 2, 2017 were adjusted to include $2.9 million of acquisition related costs, and $0.4 million of non-recurring expense related to fair value adjustment to acquisition-date inventory.

Energid Technologies Corporation

On February 26, 2018, Teradyne acquired all of the issued and outstanding shares of Energid Technologies Corporation (“Energid”) for a total purchase price of approximately $27.6 million. Energid’s technology enables and simplifies the programming of complex robotic motions used in a wide variety of end markets, ranging from heavy industry to healthcare, utilizing both traditional robots and collaborative robots. The Energid acquisition was accounted for as a business combination and, accordingly, Energid’s results have been included in Teradyne’s Industrial Automation segment from the date of acquisition. As of the acquisition date, Teradyne’s purchase price allocation was goodwill of $14.4 million, acquired intangible assets of $12.3 million with an average estimated useful life of 7.7 years, and $1.0 million of net tangible assets. The acquisition was not material to Teradyne’s condensed consolidated financial statements.