SEC Info - Janel Corp - ‘10-K’ for 9/30/19

2	ACQUISITIONS

2018 Acquisitions

Global Trading Resources, Inc

The Company acquired all of the outstanding common stock of GTRI effective as of January 3, 2018 for $528, net of $110 received in cash. An I.R.S Code Section 338(h)(10) election was made in connection with the GTRI acquisition, and the acquisition will be treated as an asset purchase for income tax purposes, which will allow for the tax deduction of GTRI’s goodwill. The acquisition of GTRI was funded with cash provided by normal operations. GTRI provides full-service cargo transportation logistics management services, including freight forwarding via air, ocean and land-based carriers, customs brokerage services, warehousing and distribution services, and other value-added logistics services. GTRI was established in 1994 and is headquartered in Portland, Oregon. The results of operations for GTRI will be in the Global Logistics Service reporting segment. GTRI results for the period from acquisition through September 30, 2018 are included in the results of operations for the twelve-month period ended September 30, 2018. Acquisition expenses associated with GTRI acquisition amounted to $26 for the year ended September 30, 2018 and is included in selling, general and administrative expenses.

Purchase price allocation

In accordance with the acquisition method of accounting, the Company allocated the consideration paid for GTRI to the net tangible and identifiable intangible assets based on their estimated fair values. The Company finalized the valuation of assets acquired and liabilities assumed, and the fair value amounts noted are in the table below. Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets (in thousands).

	Fair Value
Accounts receivable	$	308
Other assets		8
Intangibles - customer relationships		32
Intangibles - trademark		7
Intangibles - non-compete		39
Goodwill		353
Accounts payable		(266	)
Accrued expenses		(63	)
Purchase price, net of cash received	$	418

Aves Labs, Inc.

The Company acquired all of the outstanding common stock of Aves effective March 5, 2018 for $2,433, net of $72 received in cash. At closing, $1,975 was paid in cash and $497 was recorded in accrued expenses as a preliminary earnout consideration. If Aves manufactures certain products set forth in the purchase agreement, the earnout consideration is payable no later than thirty days following the determination that the applicable earnout condition has been satisfied. For the earnout consideration to be payable, the earnout condition must be satisfied no later than one hundred eighty days following closing, or September 1, 2018. As of September 30, 2018, the Company paid earnout consideration in the amount of $500 and recorded an additional $33 working capital adjustment. An I.R.S Code Section 338(h)(10) election was made in connection with the Aves acquisition, and this acquisition will be treated as an asset purchase for income tax purposes, which will allow for the tax deduction of Aves goodwill. Aves provides high quality antibodies and other immunoreagents for biomedical research and antibody manufacturing. The results of operations for Aves are reported in our Life Sciences segment. Acquisition expenses associated with the Aves acquisition amounted to $77 for the twelve months ended September 30, 2018 and is included in selling, general and administrative expenses. Aves results for the period from acquisition through September 30, 2018 are included in the results of operations for the twelve months ended September 30, 2018. This includes revenues, cost of goods sold, selling, general and administrative expense and net income from operations of Aves amounted to $636, $215, $231 and $190, respectively.

Purchase price allocation

In accordance with the acquisition method of accounting, the Company allocated the consideration paid for Aves to the net tangible and identifiable intangible assets based on their estimated fair values. The Company finalized the valuation of assets acquired and liabilities assumed, and, the fair value amounts noted are in the table below. Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets (in thousands).

	Fair Value
Accounts receivable	$	111
Inventory		1,057
Property & equipment, net		31
Intangibles - customer relationships.		330
Intangibles - - trademark		40
Intangibles - other		180
Goodwill		684
Purchase price, net of cash received	$	2,433

Antibodies Incorporated

The Company acquired Antibodies via a merger that closed effective June 22, 2018 for $4,879, net of $56 of cash received. At closing, the former stockholders of Antibodies were paid $4,535 in cash and certain former stockholders were issued an aggregate amount of $344 in subordinated promissory notes. The acquisition of Antibodies was funded with cash provided by normal operations in the amount of $1,169, the sale of Series C Preferred Stock in the amount of $1,399, a senior secured term loan in the amount of $2,025, and $344 in subordinated promissory notes to certain former shareholders of Antibodies. Antibodies is a manufacturer and distributor of monoclonal and polyclonal antibodies, diagnostic reagents and diagnostic kits and a developer and practitioner of immunoassays for academic and industry research scientists. Antibodies was founded in 1960 and is headquartered in Davis, California. The results of operations for Antibodies are reported in our Life Sciences segment. Acquisition expenses associated with Antibodies acquisition amounted to $263 for the twelve months ended September 30, 2018 and are included in selling, general and administrative expenses. Antibodies results for the period from acquisition through September 30, 2018 are included in the results of operations for the twelve months ended September 30, 2018. This includes revenues, cost of goods sold, selling, general and administrative expense, interest expense and net income from operations of Antibodies amounted to $1,348, $512, $658, $40 and $138, respectively.

Purchase price allocation

In accordance with the acquisition method of accounting, the Company allocated the consideration paid for Antibodies to the net tangible and identifiable intangible assets based on their estimated fair values. The Company finalized the valuation of assets acquired and liabilities assumed, and, the fair value amounts noted are in the table below. Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets (in thousands).

	Fair Value
Accounts receivable	$	411
Inventory		1,102
Prepaids		43
Property & equipment, net		3,373
Intangibles - - trademark		301
Intangibles - other		377
Goodwill		675
Accounts payable		(363	)
Accrued expenses		(235	)
Deferred income taxes		(805	)
Purchase price, net of cash received	$	4,879

2019 Acquisitions

The Company completed four business acquisitions in the fiscal year ended September 30, 2019, with an aggregate purchase price of $6,768, net of cash acquired. The Company recorded an aggregate $2,067 in goodwill and $2,165 in other identifiable intangibles. The results of operations of the acquired businesses are included in the Janel’s consolidated results of operations since the date of each acquisition. Supplemental pro forma information has not been provided as the acquisitions did not have a significant impact on Janel’s consolidated results of operations individually or in aggregate.

Honor Worldwide Logistics, LLC

Through its wholly-owned subsidiary, Janel Group, Inc. (“Janel Group”), the Company acquired the membership interests of Honor for $2,212, net of $70 of cash received on November 20, 2018 in a transaction pursuant to which Honor became a direct wholly-owned subsidiary of Janel Group and an indirect wholly-owned subsidiary of the Company. At closing, the former owners of Honor were paid $1,826 in cash and a subordinated promissory note in the aggregate amount of $456 was issued to a former member. The acquisition of Honor was funded with cash provided by normal operations along with a subordinated promissory note. Honor provides global logistics services with two U.S. locations and expands the domestic network of the Company’s Global Logistics Services segment. Acquisition expenses associated with the Honor acquisition amounted to $69 for the twelve months ended September 30, 2019 and are included in selling, general and administrative expenses. Honor results for the period from acquisition through September 30, 2019 are included in the results of operations for the twelve months ended September 30, 2019. This includes revenues, forwarding expense, selling, general and administrative expense, interest expense and net income from operations of Honor amounted to $4,533, $3,467, $830, $19 and $216, respectively.

Purchase price allocation

In accordance with the acquisition method of accounting, the Company allocated the consideration paid for Honor to the net tangible and identifiable intangible assets based on their estimated fair values. The Company finalized the valuation of assets acquired and liabilities assumed, and, the fair value amounts noted are in the table below. Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets (in thousands).

	Fair Value
Accounts receivable	$	1,267
Prepaids and other current assets		14
Property & equipment, net		1
Intangibles - customer relationships		910
Intangibles - trademark		20
Intangibles - non-compete		30
Goodwill		529
Security deposits		2
Accounts payable		(557	)
Accrued expenses		(4	)
Purchase price, net of cash received	$	2,212

PhosphoSolutions

Through Aves, the Company completed a business combination whereby we acquired all of the membership interests of Phospho on September 6, 2019. The aggregate purchase price for Phospho was $4,043, net of $13 of cash received. At closing, $4,000 was paid in cash and $56 was recorded in accrued expenses as preliminary tax gross up due to former owners. Phospho is a manufacturer and distributor of monoclonal and polyclonal antibodies, principally used in neuroscience research. Phospho was founded in 2001 and is headquartered in Aurora Colorado. The results of operations for Phospho are reported in our Life Sciences segment. Acquisition expenses associated with Phospho acquisition amounted to $34 for the twelve months ended September 30, 2019 and are included in selling, general and administrative expenses. Phospho results for the period from acquisition through September 30, 2019 are included in the results of operations for the twelve months ended September 30, 2019. This includes revenues, cost of goods sold, selling, general and administrative expense and net income from operations of Antibodies amounted to $96, $19, $65 and $14, respectively.

Purchase price allocation

In accordance with the acquisition method of accounting, the Company allocated the consideration paid for Phospho to the net tangible and identifiable intangible assets based on their estimated fair values. The Company finalized the valuation of assets acquired and liabilities assumed, and, the fair value amounts noted are in the table below. Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets (in thousands).

	Fair Value
Accounts receivable	$	123
Inventory		1,965
Prepaids and other current assets		49
Property & equipment, net		13
Intangibles - customer relationships		730
Intangibles - trademark		110
Intangibles - other		270
Goodwill		1,465
Security deposits		11
Accounts payable		(5	)
Accrued expenses		(55	)
Deferred income taxes		(633	)
Purchase price, net of cash received	$	4,043

Other Acquisitions

On October 17, 2018, we completed a business combination whereby we acquired substantially all of the assets and certain liabilities of a global logistics services provider with one U.S. location. On July 1, 2019, we acquired the membership interests of a life sciences company to expand our product offerings in Life Sciences. These acquisitions were funded with cash provided by normal operations. The results of operations for these acquisitions are reported in our Global Logistics Services and Life Sciences segments. The aggregate purchase price for these acquisitions was $430. At closing, $50 was recorded in accrued expenses as a preliminary earnout consideration.

This ‘10-K’ Filing	Date	Other Filings

Filed on:	1/28/20
For Period end:	9/30/19	NT 10-K, NT 10-K/A
	9/6/19	8-K
	7/1/19
	11/20/18	8-K
	10/17/18
	9/30/18	10-K, NT 10-K
	9/1/18
	6/22/18
	3/5/18
	1/3/18
		List all Filings

Janel Corp – ‘10-K’ for 9/30/19 – ‘R9’

On: Tuesday, 1/28/20, at 5:31pm ET · For: 9/30/19 · Accession #: 1140361-20-1614 · File #: 333-60608

Previous ‘10-K’: ‘10-K’ on 7/26/19 for 9/30/18 · Next: ‘10-K’ on 1/13/21 for 9/30/20 · Latest: ‘10-K’ on 12/8/23 for 9/30/23 · 1 Reference: By: Janel Corp. – Next ‘10-K’ on 1/13/21 for 9/30/20

Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

‘R9’ — Acquisitions

This is an IDEA Financial Report. [ Alternative Formats ]

Dates Referenced Herein and Documents Incorporated by Reference

1 Subsequent Filing that References this Filing

Janel Corp – ‘10-K’ for 9/30/19 – ‘R9’

On: Tuesday, 1/28/20, at 5:31pm ET · For: 9/30/19 · Accession #: 1140361-20-1614 · File #: 333-60608

Previous ‘10-K’: ‘10-K’ on 7/26/19 for 9/30/18 · Next: ‘10-K’ on 1/13/21 for 9/30/20 · Latest: ‘10-K’ on 12/8/23 for 9/30/23 · 1 Reference: By: Janel Corp. – Next ‘10-K’ on 1/13/21 for 9/30/20

Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34Filing Table of Contents

‘R9’ — Acquisitions

This is an IDEA Financial Report. [ Alternative Formats ]

Dates Referenced Herein and Documents Incorporated by Reference

1 Subsequent Filing that References this Filing

Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34
Filing Table of Contents