v3.26.1
Acquisitions
 3 Months Ended
Apr. 03, 2026
Acquisitions [Abstract]  
ACQUISITIONS

4. ACQUISITIONS

 

On November 14, 2025, the Company acquired 100% of the voting interests in Symphony Microwave Technologies, LLC (“Symphony”), a United States based company focused on the design and production of high-power microwave and RF components and subsystems, in exchange for total consideration of approximately $0.8 million. Total consideration consisted of (i) cash of approximately $0.2 million, (ii) the fair value of common stock issued of approximately $0.1 million, and (iii) the fair value of contingent consideration of approximately $0.3 million and (iv) the fair value of deferred consideration of approximately $0.2 million.

 

The acquisition has been accounted for as a business combination. The Company allocated the purchase price to the assets acquired and liabilities assumed at their estimated fair values as of the acquisition date. The excess of the purchase price paid by the Company over the estimated fair value of net assets acquired has been recorded as goodwill.

 

The following table summarizes the allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed in connection with the acquisition of Symphony:

 

    Amount  
Cash   $ 1  
Accounts receivable     358  
Inventories     221  
Customer relationships     335  
Accounts payable and accrued expenses     (481 )
Current portion of long-term debt     (65 )
Long-term debt, net of current portion     (26 )
Total identifiable net assets acquired     343  
Goodwill     504  
Total net assets acquired   $ 847  

 

Transaction-related costs incurred related to the acquisition were immaterial and were expensed as incurred in general and administrative within the consolidated statement of operations.

 

The fair value of contingent consideration included in consideration transferred was $0.3 million, which is related to an earnout arrangement with the sellers of Symphony, as estimated by a third-party valuation specialist. The contingent consideration is payable in quarterly installments through the third anniversary of the acquisition date based on the post-acquisition sales to a customer of Symphony and does not include any continuing employment conditions. There is no cap on the amount payable under the earnout. The fair value of the instrument was based on the discounted cash flows of expected future payments to this customer based on forecasted revenue during the earnout period. During the three months ended April 3, 2026, the change in fair value of contingent consideration was not material.

 

The deferred consideration of $0.2 million accrues interest monthly at an annual rate of 3.75% and is payable to the sellers within eighteen months from the acquisition date, which was included with other liabilities within the consolidated balance sheets as of April 3, 2026 and December 31, 2025. Due to the short maturity of the deferred consideration, carrying value approximates fair value. During the three months ended April 3, 2026, interest expense related to deferred consideration was not material. The Company repaid approximately $0.1 million of the deferred consideration during the three months ended April 3, 2026.

 

The Company recognized customer-related intangible assets of approximately $0.3 million, which primarily consisted of contractual and non-contractual relationships with customers. The valuation method used to determine the estimated fair value of the intangible asset was based on the multi-period excess earnings approach. The customer relationship was assigned a useful life of ten years based on historical and forecasted customer attrition.

 

Goodwill resulting from the acquisition is attributable to the value of the acquired workforce and expected synergies. Goodwill resulting from the acquisition was assigned to the Company’s EMP segment. The goodwill recognized is not deductible for tax purposes.