Acquisitions
 3 Months Ended
Apr. 03, 2020
Business Combinations [Abstract]  
Acquisitions
ACQUISITIONS
Advantor
On July 8, 2019, we acquired Advantor from Infrasafe Holding, Inc. and Infrasafe, LLC (collectively, Infrasafe). Advantor is a leading provider of integrated electronic security systems to the U.S. Government. In accordance with ASC Topic 805, Business Combinations, we accounted for this transaction using the acquisition method. We conducted valuations of certain acquired assets and liabilities for inclusion in our Condensed Consolidated Balance Sheets as of the date of acquisition. Assets that normally would not be recorded in ordinary operations (i.e. intangibles related to contractual relationships) were recorded at their estimated fair values. The excess purchase price over the estimated fair value of the net assets acquired was recorded as goodwill.
The total net consideration paid for the acquisition was $45.1 million, consisting of the purchase price of $44.0 million, net of cash acquired, and $1.1 million for working capital in excess of the working capital requirement agreed upon in the stock purchase agreement. The acquisition was funded by utilizing cash on hand and available capacity from our Amended Revolver (as defined in Note 9, “Debt”).
A breakdown of the preliminary purchase price allocation, net of cash acquired, is as follows:
(In thousands)
 
Allocation of Purchase Price
Receivables
 
$
11,535

Other current assets
 
2,719

Property, plant and equipment
 
155

Goodwill
 
28,364

Intangible assets
 
8,300

Other non-current assets
 
1,868

Accounts payable
 
(4,223
)
Other current liabilities
 
(1,519
)
Accrued compensation
 
(907
)
Other non-current liabilities
 
(1,218
)
Purchase price, net of cash acquired
 
$
45,074


Adjustments, if any, to the initial purchase accounting for the acquired net assets will be completed, as needed, up to one year from the acquisition date as we obtain additional information regarding facts and circumstances that existed as of the acquisition date.
The Company recognized two intangible assets related to customer contracts (backlog) and the Advantor trade name arising from the acquisition. The fair value of the customer contracts was $7.2 million, and the fair value of the Advantor trade name was $1.1 million with amortization periods of 5.0 years and 4.5 years, respectively. As of April 3, 2020, the remaining weighted-average amortization period for these intangible assets was 4.2 years. The Company recorded amortization expense of $0.4 million during the first quarter of 2020. The amortization expense is included in cost of revenue in our Condensed Consolidated Statements of Income.
Additionally, the Company recognized goodwill of $28.4 million arising from the acquisition, which relates primarily to acquired product and services strengthening our advance into a higher value, technology-enabled and differentiated platform, as well as extending our facilities and logistics services to include the electronic protection and security of facilities. Goodwill also includes other intangibles that do not qualify for separate recognition. The goodwill recognized for the Advantor acquisition is fully deductible for income tax purposes.
Advantor's results of operations have been included in our Condensed Consolidated Statements of Income for the period subsequent to acquisition on July 8, 2019. For the quarter ended April 3, 2020, Advantor contributed $11.2 million of revenue and an insignificant amount of income from operations before income taxes. For the quarter ended March 29, 2019, on a pro forma basis, the acquired business would have recognized revenue of $10.2 million and an insignificant amount of income from operations before income taxes.