| Goodwill and Intangible Assets Goodwill
Goodwill is calculated as the excess of consideration transferred over the net assets recognized for acquired businesses and represents future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized. The Company assesses goodwill for impairment at the reporting unit level annually on the first day of the fourth quarter and upon the occurrence of a triggering event or change in circumstance that would more likely than not reduce the fair value of a reporting unit below its carrying amount.
Goodwill is assigned to reporting units at the date the goodwill is initially recorded and is reallocated as necessary based on the composition of reporting units over time. No goodwill impairment was recognized for the Successor Period or
Predecessor Periods from July 1, 2021 through December 31, 2021 and fiscal years ended June 30, 2021, and June 30, 2020.
The following table shows changes in the carrying amount of goodwill by reportable segment as of December 31, 2021 and 2020 (in millions):
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|
|
|
|
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|
|
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|
|
|
|
|
|
| Predecessor |
| |
Medical
|
|
Industrial
|
|
Consolidated
|
| Balance—June 30, 2019 |
$ |
96.7 |
|
|
$ |
414.9 |
|
|
$ |
511.6 |
|
| Acquisition of Capintec |
6.0 |
|
|
— |
|
|
6.0 |
|
| Acquisition of Premium Analyse |
— |
|
|
4.3 |
|
|
4.3 |
|
| Acquisition of Selmic |
— |
|
|
2.7 |
|
|
2.7 |
|
| Acquisition of AWST |
4.1 |
|
|
— |
|
|
4.1 |
|
| Translation adjustment |
— |
|
|
(6.1) |
|
|
(6.1) |
|
| Balance—June 30, 2020 |
$ |
106.8 |
|
|
$ |
415.8 |
|
|
$ |
522.6 |
|
| Acquisition of Sun Nuclear |
130.2 |
|
|
— |
|
|
130.2 |
|
| Acquisition of Biodex |
11.1 |
|
|
— |
|
|
11.1 |
|
| Acquisition of Dosimetrics |
1.6 |
|
|
— |
|
|
1.6 |
|
| Translation adjustment |
(0.2) |
|
|
16.2 |
|
|
16.0 |
|
| Balance—June 30, 2021 |
$ |
249.5 |
|
|
$ |
432.0 |
|
|
$ |
681.5 |
|
| Acquisition of Dosimetry Badge |
0.9 |
|
|
— |
|
|
0.9 |
|
| Balance—Translation adjustment |
(0.4) |
|
|
(4.6) |
|
|
(5.0) |
|
| Balance—October 19, 2021 |
$ |
250.0 |
|
|
$ |
427.4 |
|
|
$ |
677.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Successor |
|
Medical |
|
Industrial |
|
Consolidated |
| Balance—October 20, 2021 |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| Acquisition of Mirion |
675.2 |
|
|
963.8 |
|
|
1,639.0 |
|
| Acquisition of CHP Badge |
1.5 |
|
|
— |
|
|
1.5 |
|
| Acquisition of Safeline |
0.8 |
|
|
— |
|
|
0.8 |
|
| Acquisition of CIRS |
35.0 |
|
|
— |
|
|
35.0 |
|
| Translation adjustment |
— |
|
|
(13.7) |
|
|
(13.7) |
|
| Balance—December 31, 2021 |
$ |
712.5 |
|
|
$ |
950.1 |
|
|
$ |
1,662.6 |
|
A portion of the goodwill is deductible for income tax purposes.
Intangible Assets
Intangible assets consist of our developed technology, customer relationships, backlog, trade names, and non-compete agreements at the time of acquisition through business combinations. The customer relationships definite lived intangible assets are amortized using the double declining balance method while all other definite lived intangible assets are amortized on a straight-line basis over their estimated useful lives.
Many of our intangible assets are not deductible for income tax purposes. A summary of intangible assets useful lives, gross carrying value and related accumulated amortization is below (in millions):
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|
|
|
|
|
|
| Successor |
|
|
|
December 31, 2021 |
|
Original Average
Life in Years |
|
Gross Carrying
Amount |
|
Accumulated
Amortization |
|
Net Book
Value |
| Customer relationships |
6-13 |
|
$ |
341.0 |
|
|
$ |
(15.3) |
|
|
$ |
325.8 |
|
| Distributor relationships |
7-13 |
|
61.0 |
|
|
(1.5) |
|
59.5 |
| Developed technology |
5-16 |
|
251.2 |
|
|
(5.9) |
|
245.3 |
| Trade names |
3-10 |
|
100.0 |
|
|
(2.1) |
|
97.9 |
| Backlog and other |
1-4 |
|
85.7 |
|
|
(7.2) |
|
78.4 |
| Total |
|
|
$ |
838.9 |
|
|
$ |
(32.0) |
|
|
$ |
806.9 |
|
|
|
|
|
|
|
|
|
| Predecessor |
|
|
|
June 30, 2021 |
|
Original Average
Life in Years |
|
Gross Carrying
Amount |
|
Accumulated
Amortization |
|
Net Book
Value |
| Customer relationships |
6-17 |
|
$ |
420.4 |
|
|
$ |
(205.6) |
|
|
$ |
214.8 |
|
| Developed technology |
3-16 |
|
184.5 |
|
|
(104.7) |
|
|
79.8 |
|
| Trade names |
5-9 |
|
47.4 |
|
|
(29.5) |
|
|
17.9 |
|
| Backlog and other |
1-9 |
|
40.6 |
|
|
(26.8) |
|
|
13.8 |
|
| Total |
|
|
$ |
692.9 |
|
|
$ |
(366.6) |
|
|
$ |
326.3 |
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2020 |
|
Original Average
Life in Years |
|
Gross Carrying
Amount |
|
Accumulated
Amortization |
|
Net Book
Value |
| Customer relationships |
6-15 |
|
$ |
358.5 |
|
|
$ |
(170.5) |
|
|
$ |
188.0 |
|
| Developed technology |
3-16 |
|
130.0 |
|
|
(81.0) |
|
|
49.0 |
|
| Trade names |
5-9 |
|
32.9 |
|
|
(22.4) |
|
|
10.5 |
|
| Backlog and other |
1-9 |
|
22.8 |
|
|
(22.0) |
|
|
0.8 |
|
| Total |
|
|
$ |
544.2 |
|
|
$ |
(295.9) |
|
|
$ |
248.3 |
|
Aggregate amortization expense for intangible assets included in cost of revenues and operating expenses was as follows (in millions):
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
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|
|
|
Successor |
|
|
Predecessor |
|
From October 20, 2021
through December 31, 2021 |
|
|
From July 1, 2021 through
October 19, 2021 |
|
Fiscal Year Ended June 30, 2021 |
|
Fiscal Year Ended June 30, 2020 |
|
Fiscal Year Ended June 30, 2019 |
| Amortization expense for intangible assets in: |
|
|
|
|
|
|
|
|
|
|
| Cost of revenues |
$ |
5.6 |
|
|
|
$ |
6.6 |
|
|
$ |
20.9 |
|
|
$ |
17.9 |
|
|
$ |
18.4 |
|
| Operating expenses |
$ |
26.4 |
|
|
|
$ |
13.1 |
|
|
$ |
41.9 |
|
|
$ |
32.7 |
|
|
$ |
34.5 |
|
Future annual amortization expense at current exchange rates is as follows (in millions):
|
|
|
|
|
|
| Fiscal year ending December 31: |
|
| 2022 |
$ |
142.9 |
|
| 2023 |
126.9 |
|
| 2024 |
112.5 |
|
| 2025 |
90.4 |
|
| 2026 |
83.3 |
|
| 2027 and thereafter |
250.9 |
|
| Total |
$ |
806.9 |
|
|