Note F - Acquisition
|12 Months Ended|
Sep. 30, 2019
|Notes to Financial Statements|
|Business Combination Disclosure [Text Block]||
NOTE F – ACQUISITION
February 20, 2018,the Company completed the acquisition of a portfolio of Telcordia certified outdoor active cabinet products from Calix, Inc. (“Calix”) upon the terms and conditions contained in an Asset Purchase Agreement dated
February 20, 2018.
The introduction of the Clearfield active cabinet line provides customers a single point of contact for cabinet solutions—both passive and powered. The acquisition enables Clearfield to expand its Fiber-to-Anywhere expertise to include active powered electronic cabinet platforms while leveraging its supply chain. The acquisition also enables Clearfield to capitalize on and expand its reach to a broader customer base, including service providers in the Tier
Acquisition date fair value of the consideration transferred totaled
$10,350,000which was comprised of a cash payment of
$10,350,000from the Company’s cash operating account. We assumed
noliabilities in the acquisition.
The following table summarizes the estimated fair values of the assets acquired at the acquisitiondate:
The active cabinet acquisition resulted in
$2,138,000of goodwill, which is expected to be deductible for tax purposes
. Specifically, the goodwill recorded as part of the acquisition of the Calix active cabinets includes the expected synergies and other benefits that we believe will result from combining the operations of active cabinet lines with the operations of Clearfield, Inc.
The Company incurred approximately
$106,000in legal, professional, and other costs related to this acquisition accounted for as selling and administrative expenses when incurred. The remaining weighted-average useful life of intangible assets acquired was
12.5years as of the acquisition date.
As the active cabinet business was
notoperated as a separate subsidiary, division or entity, Calix did
notmaintain separate financial statements for the active cabinet business. As a result, we are unable to accurately determine earnings/loss for the active cabinet business on a standalone basis since the date of acquisition.
The following table below reflects our unaudited pro forma combined results of operations as if the acquisition had taken place as of
October 1, 2016and shows the net sales and net income as if the active cabinet business were combined with the Clearfield business for the years ended
September 30, 2018and
The pro forma includes estimated expenses relating to the amortization of intangibles purchased, the amortization of the inventory fair value adjustment, and estimated personnel costs:
The pro forma unaudited results do
notpurport to be indicative of the results which would have been obtained had the acquisition been completed as of the beginning of the earliest period presented or of results that
maybe obtained in the future. In addition, they do
notinclude any benefits that
mayresult from the acquisition due to synergies that
maybe derived from the elimination of any duplicative costs.
The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef