We periodically complete business combinations that align with our business strategy. Acquisitions are accounted for using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at fair value as of the acquisition date and the results of operations of each acquired business are included in our consolidated statements of comprehensive income from their respective dates of acquisition. Acquisition costs are recorded in selling, general and administrative expenses as incurred.

    

On Bio-Techne acquired all the outstanding stock of Space Import-Export, Srl (Space) of Milan, Italy for the equivalent of approximately million. million was paid on the acquisition date and the remaining million will be paid on Space was a long-time distribution partner of Bio-Techne in the Italian market. The acquisition resulted in goodwill as we expect strategic benefits of revenue growth from increased market penetration

. The goodwill is not deductible for income tax purposes.

The business became part of the Company’s Biotechnology reportable segment in the quarter of

 

Certain estimated fair values are not yet finalized and are subject to change, which could be significant. The Company expects to finalize these by the filing of the Form -K when our valuation models for acquired intangible assets are completed, including the determination of related estimated useful lives. Amounts for intangible assets, and related deferred tax liabilities, and goodwill remain subject to change. The preliminary estimated fair values of the assets acquired and liabilities assumed in each acquisition, pending final valuation of intangible assets, are as follows (in thousands):

 

 

On Bio-Techne acquired all of the outstanding stock of ACD for approximately million, net of cash acquired, plus contingent consideration of up to million as follows:

 

During the quarter, management determined that the calendar year revenue milestone was met. Refer to Note for discussion of this item as well as discussion of the changes to the estimate for the calendar year revenue milestone as of

  

Bio-Techne paid million on the acquisition date. The remaining million will be payed to current employees who held ACD stock at the acquisition date in quarterly installments from through This liability recorded on the Bio-Techne balance sheet under the caption “Related party note payable, current”.

 

The goodwill recorded as a result of the ACD acquisition represents the strategic benefits of growing the Company's product portfolio and the expected revenue growth from increased market penetration from future products and customers. The goodwill is not deductible for income tax purposes.

The business became part of the Company’s Biotechnology reportable segment in the quarter of

 

Certain estimated values are not yet finalized and are subject to change, which could be significant. The Company will finalize the amounts recognized as information necessary to complete the analysis is obtained. The Company expects to finalize these by the filing of the Form -K when our valuation models for acquired intangible assets are completed, including the determination of related estimated useful lives. Amounts for inventory, intangible assets, deferred tax assets and liabilities, and goodwill remain subject to change.

 

The following table (in thousands) summarizes the value of ACD assets acquired and liabilities assumed as of the acquisition date. Also summarized in the table, subsequent to the acquisition, net adjustments to goodwill of million to the preliminary purchase price allocation have been recorded. These net million adjustment is comprised of a million adjustment to record additional consideration payable which was part of the purchase agreement and a million working capital adjustment which were partially offset by a million decrease in net deferred tax liabilities based on updated estimates.

 

 

Tangible assets acquired, net of liabilities assumed, were stated at fair value at the date of acquisitions based on management's assessment. The purchase price allocated to developed technology, trade names, and customer relationships was based on management's forecasted cash inflows and outflows and using a relief-from-royalty and a multi-period excess earnings method to calculate the fair value of assets purchased. The developed technology is being amortized with the expense reflected in cost of goods sold in the Condensed Consolidated Statement of Earnings and Comprehensive Income. Amortization expense related to trade names, and customer relationships is reflected in selling, general and administrative expenses in the Consolidated Statement of Earnings and Comprehensive Income. The preliminary amortization periods for intangible assets acquired in fiscal are estimated to be years for developed technology, years for trade names, years for customer relationships, and years for non-competes. The deferred income tax liability represents the net amount of the estimated future impact of adjustments for costs to be recognized upon the sale of acquired inventory that was written up to fair value and intangible asset amortization, both of which are not deductible for income tax purposes.

 

As previously disclosed, ACD was acquired on The unaudited pro forma financial information below summarizes the combined results of operations for Bio-Techne and ACD as though the companies were combined as of the beginning fiscal The pro forma financial information for all periods presented includes the purchase accounting effects resulting from these acquisitions except for the increase in inventory to fair value and the fair value adjustments to contingent consideration as these are not expected to have a continuing impact on cost of goods sold or selling, general and administrative expense, respectively. The pro forma financial information as presented below is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place at the beginning of fiscal

 

 

During the months ended we made certain purchase accounting adjustments for the acquisition of Zephyrus Biosciences, Inc. (Zephyrus), which was acquired in for which purchase accounting was still open as of Further information regarding this acquisition can be found under the caption “Note Acquisitions” in the Notes to Consolidated Financial Statements appearing in the Form -K. The adjustments recorded during months ended included a million increase to the contingent consideration liability resulting from the finalization of the valuation model, a million increase to intangible assets resulting from valuation model adjustments, and a million increase to net deferred tax assets. A corresponding million increase was recorded to goodwill from the preliminary amount recorded as of The Company finalized the purchase accounting for this acquisition during the quarter.