Annual report pursuant to Section 13 and 15(d)

Business Combinations

v3.24.1
Business Combinations
 12 Months Ended
Dec. 31, 2023
Business Combination and Asset Acquisition [Abstract]  
Business Combinations
Note C – Business Combinations
QinetiQ Space NV Acquisition
On October 31, 2022, the Company acquired 100% of the equity interests in QinetiQ Space NV (“Space NV”) for $36.9 million (€37 million) in cash. The acquisition supports the Company’s growth in its offering of satellite technologies, berthing and docking equipment, space instruments and advanced payloads, as well as expanded its global footprint.

The following table summarizes the fair value of the consideration transferred and the estimated fair values of the major classes of assets acquired and liabilities assumed as of the acquisition date.
October 31, 2022
Cash paid
 $ 36,930 
Purchase consideration
 $ 36,930 
Assets:
Cash
 $ 3,700 
Accounts receivable and other receivable
 3,606 
October 31, 2022
Contract assets
 18,830 
Prepaid expenses and other current assets 3,100 
Property, plant and equipment
 5,656 
Right-of-use assets 1,166 
Intangible assets
 13,935 
Equity method investments
 3,000 
Total assets
 52,993 
Liabilities:
Accounts payable
 4,201 
Short-term operating lease liabilities 199 
Short-term finance lease liabilities 279 
Accrued expenses
 18,636 
Deferred revenue
 5,513 
Other current liabilities
 399 
Long-term operating lease liabilities 908 
Long-term finance lease liabilities 563 
Deferred tax liabilities 2,727 
Other non-current liabilities 281 
Total liabilities
 33,706 
Fair value of net identifiable assets acquired
 19,287 
Less: Fair value of noncontrolling interests
 215 
Goodwill
 $ 17,858 

The following table summarizes the intangible assets acquired by class:
October 31, 2022 Weighted average
useful life
in years
Technology $ 4,700  7
Customer relationships 7,400  30
Software 235  2
IPR&D
 1,600 
Total intangible assets
 $ 13,935 

During the year ended December 31, 2023, the Company recorded a non-cash measurement period adjustment to goodwill of $0.5 million, which increased the balance of goodwill to $17.9 million as of December 31, 2023.

The fair value of the acquired technology and IPR&D was estimated using the relief from royalty (“RFR”) method. The fair value of the acquired customer relationships was estimated using the excess earnings method. The fair value of the acquired investment in RSS was estimated using the guideline public company method.

The acquisition was accounted for as a business combination, whereby the excess of the consideration paid over the fair value of identifiable net assets was allocated to goodwill. The goodwill reflects the potential synergies and expansion of the Company’s offerings across product lines and markets complementary to its existing products and markets. For tax purposes, the goodwill is not deductible.
The results of operations of Space NV for the period from October 31, 2022 to December 31, 2022 have been included in the results of operations for the year ended December 31, 2022. The table below presents the post-acquisition revenues, net income (loss) attributable to Redwire Corporation, and acquisition-related costs (included in transaction expenses) of Space NV included in the consolidated statements of operations and comprehensive income (loss) for the following period:
  December 31, 2022
Post-acquisition revenues
 $ 11,658 
Net income (loss) attributable to Redwire Corporation $ (294)
Transaction expenses $ 3,112 

Pro Forma Financial Data (Unaudited)
The table below presents the pro forma combined results of operations for the business combination for the year ended December 31, 2022 as though the acquisition of Space NV had been completed as of January 1, 2021.
Year Ended
December 31, 2022
Revenues
 $ 207,761 
Net income (loss) attributable to Redwire Corporation (129,645)
The amounts included in the pro forma information are based on the historical results and do not necessarily represent what would have occurred if the Space NV acquisition had taken place as of January 1, 2021, nor do they represent the results that may occur in the future. Accordingly, the pro forma financial information should not be relied upon as being indicative of the results that would have been realized had the business combination occurred as of the date indicated or that may be achieved in the future.

The Company incurred nominal costs during the year ended December 31, 2023 and $3.2 million of costs during the year ended December 31, 2022, related to completed acquisitions as of the respective periods. Costs incurred in 2022 were attributable to the Redwire Space Technologies, Inc. (f/k/a Techshot, Inc.) (“Techshot”) and Space NV acquisitions. These expenses are included in transaction expenses on the consolidated statements of operations and comprehensive income (loss) and are also reflected in the pro forma results for the periods presented in the table above.