Acquisition |
9 Months Ended |
|---|---|
Sep. 30, 2011 | |
| Acquisition [Abstract] | |
| Acquisition |
NOTE 4 – ACQUISITION
On July 27, 2011, the Company acquired Patapsco Designs Limited of the UK ("Patapsco"). The purchase price totals $5,031,000, with cash acquired totaling $862,000. The purchase price includes initial consideration of $3,271,000, deferred consideration of $491,000 to be paid out no later than 18 months from the acquisition date, $656,000 in working capital adjustments, and $613,000 in contingent consideration. The Company has agreed to pay consideration up to $818,000 contingent upon the Patapsco business meeting gross margin and other non-financial targets, with the consideration to paid out no later than two years from the acquisition date. Although the maximum contingent consideration is $818,000, the Company has recognized $613,000 as the estimated fair value of the contingent consideration at the date of acquisition. This contingent consideration has been calculated based on the exchange rate at the date of acquisition and actual payments may differ based on fluctuations in the exchange rate between the dollar and the pound. At September 30, 2011, the Company had estimated liabilities of $1,681,000 related to outstanding consideration payments.
The estimated assets and liabilities of Patapsco were recorded in the consolidated balance sheet within the Transition Networks segment at September 30, 2011. The preliminary purchase price allocation was based on estimates of the fair value of assets acquired and liabilities assumed and included total assets of $5,864,000, including estimated goodwill of $2,032,000 and estimated intangibles of $1,616,000, and total liabilities of $833,000. All balances recorded are estimated amounts; the purchase price allocation will be finalized subsequent to the third quarter as the valuation of identifiable assets and liabilities is completed. The pro forma impact of Patapsco was not significant to the Company's results for the three and nine months ended September 30, 2011. |