UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 1, 2006

BRUKER BIOSCIENCES CORPORATION

(Exact name of registrant as specified in its charter)

 

40 Manning Road

Billerica, MA 01821

(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code: (978) 663-3660

Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the reporting obligation of the registrant under any of the following provisions:

o               Written communications pursuant to Rule 425 under the Securities Act

o               Soliciting material pursuant to Rule 14a-12 of the Exchange Act

o               Pre-commencement communications pursuant to Rule 14d-2(b) Exchange Act

o               Pre-commencement communications pursuant to Rule 13e-4(c) Exchange Act

 

Bruker BioSciences Corporation
Form 8-K/A
Index

Item 2.01	Completion of Acquisition or Disposition of Assets
Item 9.01	Financial Statements and Exhibits
	(a)	Financial Statements of Acquired Business
	(b)	Pro Forma Financial Information
		Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2006
		Unaudited Pro Forma Condensed Combined Statements of Operations –
		For the six months ended June 30, 2006 and 2005
		For the years ended December 31, 2005, 2004 and 2003
		Notes to Unaudited Pro Forma Condensed Combined Financial Statements
	(c)	Exhibits

 

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Item 2.01.         Completion of Acquisition or Disposition of Assets.

On July 1, 2006, the Company completed the previously announced acquisition of all of the outstanding stock of Bruker Optics from the Bruker Optics stockholders in accordance with the terms of the stock purchase agreement, dated as of April 17, 2006, by and among the Company, Bruker Optics and the stockholders of Bruker Optics (the “Stock Purchase Agreement”). As previously reported, at the Company’s annual meeting of stockholders, held on June 29, 2006, the Company’s stockholders approved the acquisition and the issuance of shares of the Company’s common stock in connection with the acquisition.

Prior to the completion of the acquisition, the Company’s chief executive officer and chairman of the board, Frank H. Laukien, and certain of his family members owned stock in both the Company and Bruker Optics. Dr. Laukien and his related family members owned an aggregate of 58% of the Company’s common stock and 99% of the shares of Bruker Optics being acquired by the Company. Following the completion of the acquisition, Dr. Laukien and his related family members own, in the aggregate, approximately 63% of the outstanding shares of common stock of the Company. In addition, Dr. Laukien’s half brother, Dirk D. Laukien, is the President of Bruker Optics and, following the Company’s acquisition of Bruker Optics, became a senior vice president of the Company.

At the closing, the Company paid an aggregate of $135 million of consideration to the Bruker Optics stockholders and holders of Bruker Optics stock options, of which approximately $79 million was paid in cash and approximately $56 million was paid in restricted unregistered shares of Company common stock. As a result of the acquisition, Bruker Optics became a wholly-owned subsidiary of the Company.

$13.5 million of the cash payment to the Bruker Optics stockholders is being held in escrow until the later of (x) the thirtieth day following receipt by the Company of Bruker Optics’ audited financial statements for the fiscal year ended December 31, 2006, or (y) the resolution of any indemnification claim pending as of the receipt of such audited financial statements. In addition, $1 million of the cash payment to the Bruker Optics stockholders is being held in escrow until the later of (x) the twentieth day after the Company delivers a closing balance sheet of Bruker Optics to the Bruker Optics stockholders, which balance sheet is to be delivered within 90 days of the closing of the acquisition, or (y) the resolution of any objections to the balance sheet.

The foregoing description of the Stock Purchase Agreement is qualified in its entirety by reference to the full text of the Stock Purchase Agreement, which was filed with the Securities and Exchange Commission on the Company’s Current Report on Form 8-K on July 7, 2006.

Item 9.01.         Financial Statements and Exhibits.

(a)                Financial Statements of Businesses Acquired

The consolidated financial statements of Bruker Optics are attached hereto as listed in the index on page F-1 herein.

(b)                Unaudited Pro Forma Financial Information

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2006 and Statements of Operations for the six months ended June 30, 2006 and 2005 and for the years ended December 31, 2005, 2004 and 2003 include the historical consolidated statements of operations of the combined Bruker BioSciences and Bruker Optics, giving effect to the acquisition as if it had occurred on January 1, 2003. This information is only a summary, and you should read it in conjunction with the Bruker BioSciences historical consolidated financial statements and related notes and Management’s Discussion and Analysis

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of Financial Condition and Results of Operations contained in the annual reports, quarterly reports and other information on file with the Securities and Exchange Commission and Bruker Optics historical consolidated financial statements and related notes contained elsewhere in this Form 8-K/A (see pages F-1 through F-21).

Both Bruker BioSciences and Bruker Optics were majority owned by five affiliated stockholders. As a result, the acquisition of Bruker Optics by Bruker BioSciences was considered a business combination of companies under common control and is being accounted for in a manner similar to a pooling-of-interests. Accordingly, the acquisition of Bruker Optics, as it relates to the portion under common ownership (approximately 96%) is being accounted for at historical carrying values. The portion not under the common ownership of the five affiliated stockholders (approximately 4%) is being accounted for using the purchase method of accounting (at fair value) on a pro rata basis. The excess purchase price of the interest not under common control over the fair value of the related net assets acquired, approximately $4.3 million, is being accounted for as goodwill and intangible assets.

We have prepared the unaudited pro forma condensed combined financial statements based on available information, using assumptions that we believe are reasonable. These unaudited pro forma condensed combined financial statements are being provided for informational purposes only. They do not purport to represent our actual financial position or results of operations had the acquisition occurred on the dates specified nor do they project our results of operations or financial position for any future period or date.

The Unaudited Pro Forma Condensed Combined Statements of Operations do not reflect any adjustments for non-recurring items or anticipated synergies resulting from the acquisition. Pro forma adjustments are based on certain assumptions and other information that are subject to change as additional information becomes available.

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UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF JUNE 30, 2006

		Bruker			Bruker						Historical			Pro Forma			Pro Forma
		BioSciences			Optics			Eliminations			Combined			Adjustments			Combined
		(in thousands)
ASSETS
Current assets:
Cash and cash equivalents		$	96,596		$	12,828		$	—		$	109,424		$	(59,147	)(3a)	$	50,277
Accounts receivable, net		61,709			10,910			—			72,619			—			72,619
Due from affiliated companies		2,678			2,939			(1,457		)(2a)	4,160			—			4,160
Inventories		103,174			24,221			—			127,395			—			127,395
Other current assets		11,879			4,318			—			16,197			(548		)(3f)	15,649
Total current assets		276,036			55,216			(1,457		)	329,795			(59,695		)	270,100
Property, plant and equipment, net		74,864			13,173			—			88,037			—			88,037
Intangibles and other assets		28,826			72			—			28,898			4,259		(3b)	33,157
Total assets		$	379,726		$	68,461		$	(1,457	)	$	446,730		$	(55,436	)	$	391,294
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings		$	9,613		$	1,283		$	—		$	10,896		$	—		$	10,896
Accounts payable		12,340			2,870			—			15,210			1,585		(3c)	16,795
Due to affiliated companies		3,472			2,479			(1,457		)(2a)	4,494			—			4,494
Other current liabilities		90,965			27,855			—			118,820			—			118,820
Total current liabilities		116,390			34,487			(1,457		)	149,420			1,585			151,005
Long-term debt		21,969			3,463			—			25,432			20,000		(3a)	45,432
Other long-term liabilities		22,969			2,075			—			25,044			—			25,044
Minority interest		324			—			—			324			—			324
Stockholders equity:
Common stock		901			188			—			1,089			(114		)(3d)	975
Additional paid-in capital		217,039			3,389			—			220,428			(76,359		)(3e)	144,069
Retained earnings (accumulated deficit)		(17,287		)	22,072			—			4,785			(548		)(3f)	4,237
Accumulated other comprehensive income		17,421			2,787			—			20,208			—			20,208
Total shareholders’ equity		218,074			28,436			—			246,510			(77,021		)	169,489
Total liabilities and shareholders’ equity		$	379,726		$	68,461		$	(1,457	)	$	446,730		$	(55,436	)	$	391,294

 

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2006

 

		Bruker			Bruker						Historical			Pro Forma			Pro Forma
		BioSciences			Optics			Eliminations			Combined			Adjustments			Combined
		(in thousands, except per share data)
Product revenue		$	132,330		$	41,024		$	(1,178	)(2b)	$	172,176		$	—		$	172,176
Service revenue		19,043			3,816			(589		)(2c)	22,270			—			22,270
Other revenue		877			16			—			893			—			893
Total revenue		152,250			44,856			(1,767		)	195,339			—			195,339
Cost of product revenue		74,841			19,304			(1,390		)(2d)	92,755			—			92,755
Cost of service revenue		10,500			2,777			(672		)(2e)	12,605			—			12,605
Total cost of revenue		85,341			22,081			(2,062		)	105,360			—			105,360
Gross profit		66,909			22,775			295			89,979			—			89,979
Operating expenses:
Sales and marketing		29,398			10,334			—			39,732			—			39,732
General and administrative		11,148			1,932			—			13,080			280		(4a)	13,360
Research and development		20,993			3,566			—			24,559			—			24,559
Acquisition related charges		2,368			2,500			—			4,868			(4,868		)(4b)	—
Total operating expenses		63,907			18,332			—			82,239			(4,588		)	77,651
Operating income		3,002			4,443			295			7,740			4,588			12,328
Interest and other income (expense), net		1,122			2,891			—			4,013			(1,719		)(4c)	2,294
Income before income tax provision and minority interest in consolidated subsidiaries		4,124			7,334			295			11,753			2,869			14,622
Income tax provision		2,775			2,970			118		(2f)	5,863			900			6,763
Income before minority interest in consolidated subsidiaries		1,349			4,364			177			5,890			1,969			7,859
Minority interest in consolidated subsidiaries		93			—			—			93			—			93
Net income		$	1,256		$	4,364		$	177		$	5,797		$	1,969		$	7,766
Net income per common share - basic and diluted		$	0.01														$	0.08
Weighted average common shares outstanding:
Basic		90,054												11,375		(4d)	101,429
Diluted		90,403												11,375		(4d)	101,778

 

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2005

 

		Bruker			Bruker						Historical			Pro Forma			Pro Forma
		BioSciences			Optics			Eliminations			Combined			Adjustments			Combined
		(in thousands, except per share data)
Product revenue		$	127,547		$	31,868		$	(1,158	)(2b)	$	158,257		$	—		$	158,257
Service revenue		17,732			3,086			(579		)(2c)	20,239			—			20,239
Other revenue		1,000			96			—			1,096			—			1,096
Total revenue		146,279			35,050			(1,737		)	179,592			—			179,592
Cost of product revenue		72,540			15,147			(1,181		)(2d)	86,506			—			86,506
Cost of service revenue		11,815			1,975			(600		)(2e)	13,190			—			13,190
Total cost of revenue		84,355			17,122			(1,781		)	99,696			—			99,696
Gross profit		61,924			17,928			44			79,896			—			79,896
Operating expenses:
Sales and marketing		25,537			9,039			—			34,576			—			34,576
General and administrative		10,955			1,549			—			12,504			280		(4a)	12,784
Research and development		21,982			3,043			—			25,025			—			25,025
Total operating expenses		58,474			13,631			—			72,105			280			72,385
Operating income		3,450			4,297			44			7,791			(280		)	7,511
Interest and other income (expense), net		424			(919		)	—			(495		)	(1,719		)(4c)	(2,214		)
Income before income tax provision and minority interest in consolidated subsidiaries		3,874			3,378			44			7,296			(1,999		)	5,297
Income tax provision		3,070			1,343			17		(2f)	4,430			—			4,430
Income before minority interest in consolidated subsidiaries		804			2,035			27			2,866			(1,999		)	867
Minority interest in consolidated subsidiaries		103			—			—			103			—			103
Net income		$	701		$	2,035		$	27		$	2,763		$	(1,999	)	$	764
Net income per common share - basic and diluted		$	0.01														$	0.01
Weighted average common shares outstanding:
Basic		89,471												11,375		(4d)	100,846
Diluted		89,591												11,375		(4d)	100,966

 

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2005

 

		Bruker			Bruker						Historical			Pro Forma			Pro Forma
		BioSciences			Optics			Eliminations			Restated			Adjustments			Combined
Product revenue		$	259,645		$	72,476		$	(3,226	)(2b)	$	328,895		$	—		$	328,895
Service revenue		35,856			5,963			(791		)(2c)	41,028			—			41,028
Other revenue		2,068			262			—			2,330			—			2,330
Total revenue		297,569			78,701			(4,017		)	372,253			—			372,253
Cost of product revenue		147,364			33,954			(3,037		)(2d)	178,281			—			178,281
Cost of service revenue		24,398			4,324			(729		)(2e)	27,993			—			27,993
Total cost of revenue		171,762			38,278			(3,766		)	206,274			—			206,274
Gross profit		125,807			40,423			(251		)	165,979			—			165,979
Operating expenses:
Sales and marketing		51,438			19,020			—			70,458			—			70,458
General and administrative		22,374			3,227			—			25,601			559		(4a)	26,160
Research and development		41,357			6,141			—			47,498			—			47,498
Total operating expenses		115,169			28,388			—			143,557			559			144,116
Operating income		10,638			12,035			(251		)	22,422			(559		)	21,863
Interest and other income (expense), net		1,311			(2,091		)	—			(780		)	(3,438		)(4c)	(4,218		)
Income before income tax provision and minority interest in consolidated subsidiaries		11,949			9,944			(251		)	21,642			(3,997		)	17,645
Income tax provision		8,263			3,693			(101		)(2f)	11,855			—			11,855
Income before minority interest in consolidated subsidiaries		3,686			6,251			(150		)	9,787			(3,997		)	5,790
Minority interest in consolidated subsidiaries		40			—			—			40			—			40
Net income		$	3,646		$	6,251		$	(150	)	$	9,747		$	(3,997	)	$	5,750
Net income per common share - basic and diluted		$	0.04														$	0.06
Weighted average common shares outstanding:
Basic		89,521												11,375		(4d)	100,896
Diluted		89,828												11,375		(4d)	101,203

 

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2004

		Bruker			Bruker						Historical			Pro Forma			Pro Forma
		BioSciences			Optics			Eliminations			Combined			Adjustments			Combined
Product revenue		$	249,929		$	68,188		$	(848	)(2b)	$	317,269		$	—		$	317,269
Service revenue		32,298			5,813			(730		)(2c)	37,381			—			37,381
Other revenue		2,189			150			—			2,339			—			2,339
Total revenue		284,416			74,151			(1,578		)	356,989			—			356,989
Cost of product revenue		145,188			38,042			(853		)(2d)	182,377			—			182,377
Cost of service revenue		20,752			3,731			(725		)(2e)	23,758			—			23,758
Total cost of revenue		165,940			41,773			(1,578		)	206,135			—			206,135
Gross profit		118,476			32,378			—			150,854			—			150,854
Operating expenses:
Sales and marketing		55,976			16,740			—			72,716			—			72,716
General and administrative		20,399			2,781			—			23,180			559		(4a)	23,739
Research and development		43,219			5,145			—			48,364			—			48,364
Total operating expenses		119,594			24,666			—			144,260			559			144,819
Operating income		(1,118		)	7,712			—			6,594			(559		)	6,035
Interest and other income (expense), net		(3,779		)	(1,068		)	—			(4,847		)	(3,438		)(4c)	(8,285		)
Income before income tax provision and minority interest in consolidated subsidiaries		(4,897		)	6,644			—			1,747			(3,997		)	(2,250		)
Income tax provision		2,865			2,668			—		(2f)	5,533			—			5,533
Income before minority interest in consolidated subsidiaries		(7,762		)	3,976			—			(3,786		)	(3,997		)	(7,783		)
Minority interest in consolidated subsidiaries		69			—			—			69			—			69
Net income		$	(7,831	)	$	3,976		$	—		$	(3,855	)	$	(3,997	)	$	(7,852	)
Net income per common share - basic and diluted		$	(0.09	)													$	(0.08	)
Weighted average common shares outstanding:
Basic		88,495												11,375		(4d)	99,870
Diluted		88,495												11,375		(4d)	99,870

 

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003

		Bruker			Bruker						Historical			Pro Forma			Pro Forma
		BioSciences			Optics			Eliminations			Combined			Adjustments			Combined
Product revenue		$	239,056		$	55,343		$	(749	)(2b)	$	293,650		$	—		$	293,650
Service revenue		20,325			4,564			(9		)(2c)	24,880			—			24,880
Other revenue		1,298			140			—			1,438			—			1,438
Total revenue		260,679			60,047			(758		)	319,968			—			319,968
Cost of product revenue		140,597			31,010			(721		)(2d)	170,886			—			170,886
Cost of service revenue		13,732			3,121			7		(2e)	16,860			—			16,860
Total cost of revenue		154,329			34,131			(714		)	187,746			—			187,746
Gross profit		106,350			25,916			(44		)	132,222			—			132,222
Operating expenses:
Sales and marketing		51,707			15,250			—			66,957			—			66,957
General and administrative		17,335			2,305			—			19,640			559		(4a)	20,199
Research and development		37,244			4,313			—			41,557			—			41,557
Reversal of Liability Accrual		(1,929		)	—			—			(1,929		)	—			(1,929		)
Special charges		11,674			—			—			11,674			—			11,674
Total operating expenses		116,031			21,868			—			137,899			559			138,458
Operating income		(9,681		)	4,048			(44		)	(5,677		)	(559		)	(6,236		)
Interest and other income (expense), net		998			(438		)	—			560			(3,438		)(4c)	(2,878		)
Income before income tax provision and minority interest in consolidated subsidiaries		(8,683		)	3,610			(44		)	(5,117		)	(3,997		)	(9,114		)
Income tax provision		9,724			1,475			(17		)(2f)	11,182			—			11,182
Income before minority interest in consolidated subsidiaries		(18,407		)	2,135			(27		)	(16,299		)	(3,997		)	(20,296		)
Minority interest in consolidated subsidiaries		(853		)	—			—			(853		)	—			(853		)
Net income		$	(17,554	)	$	2,135		$	(27	)	$	(15,446	)	$	(3,997	)	$	(19,443	)
Net income per common share - basic and diluted		$	(0.22	)													$	(0.21	)
Weighted average common shares outstanding:
Basic		81,280												11,375		(4d)	92,655
Diluted		81,280												11,375		(4d)	92,655

 

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

1.                   Description of Transaction and Basis of Presentation

Bruker BioSciences acquired all of the stock of Bruker Optics for a fixed purchase price of $135.0 million. Approximately $79.1 million (or 58.6% of the purchase price) was paid in cash, while the stock component, worth approximately $55.9 million (or 41.4% of the purchase price), was paid in Bruker BioSciences stock. The cash component of the purchase price was funded from approximately $60 million of existing cash, and approximately $20 million from a new revolving credit facility. The number of Bruker BioSciences shares issued for the stock component of the purchase price was determined by dividing $55.9 million by the trailing average of Bruker BioSciences closing prices per share, as reported in The Wall Street Journal, for the period of ten (10) consecutive trading days ending three (3) days prior to the closing date, which was July 1, 2006.

Five members of the Laukien family, who owned approximately 58% of Bruker BioSciences on an undiluted basis, also owned approximately 98.63% of the stock of Bruker Optics prior to the consummation of the acquisition. As a result, this acquisition was a related-party transaction. Pursuant to the stock purchase agreement, the transaction was subject to the approval of both the affirmative vote of the holders of a majority of the shares of Bruker BioSciences common stock present or represented by proxy at the annual Meeting and entitled to vote, and the affirmative vote of the holders of shares of Bruker BioSciences common stock who are unaffiliated with the five Laukien family members and who represent at least a majority of the total votes cast by these unaffiliated holders at the Annual Meeting. The acquisition agreement was signed among Bruker BioSciences, Bruker Optics and all of the Bruker Optics stockholders.

Since both Bruker BioSciences and Bruker Optics were majority owned by five affiliated stockholders, the acquisition of Bruker Optics by Bruker BioSciences was considered a business combination of companies under common control and is being accounted for in a manner similar to a pooling-of-interests. Accordingly, the acquisition of Bruker Optics, as it relates to the portion under common ownership, is being accounted for at historical carrying values. The portion not under the common ownership of the five affiliated stockholders is being accounted for using the purchase method of accounting (at fair value) on a pro rata basis. The excess purchase price of the interest not under common control over the fair value of the related net assets acquired is being accounted for as goodwill and intangible assets.

The pro forma adjustments are based on available information and various estimates and assumptions. Actual adjustments may differ from the pro forma adjustments. Bruker BioSciences believes that these assumptions provide a reasonable basis for presenting the significant effects of the acquisition and that the pro forma adjustments give appropriate effect to these assumptions and are properly applied in the unaudited pro forma condensed combined financial statements.

2.                   Eliminations in the Unaudited Pro Forma Combined Balance Sheet and Statements of Operations

The eliminations column in the unaudited pro forma combined financial statements reflects the elimination of all intercompany transactions, which include (in thousands):

(a)                Adjustment to eliminate intercompany accounts receivable and payable balances at the end of the period.

(b)               Adjustment to eliminate product sales between Bruker BioSciences and Bruker Optics during the period presented.

(c)                Adjustment to eliminate service sales between Bruker BioSciences and Bruker Optics during the period presented.

(d)               Adjustment to eliminate product cost of sales between Bruker BioSciences and Bruker Optics

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during the period presented as well as profit in inventory at the end of each period.

(e)                Adjustment to eliminate service cost of sales between Bruker BioSciences and Bruker Optics during the period presented as well as profit in inventory at the end of each period.

(f)                  Adjustment to record the income tax provision (benefit) associated with the elimination of profit in inventory.

3.                   Pro Forma Adjustments to the Unaudited Pro Forma Condensed Combined Balance Sheet

The unaudited pro forma condensed combined balance sheet gives effect to the acquisition as if it occurred on June 30, 2006. Pro forma adjustments have been made and are described below (in thousands, except share and per share data)

(a)                The cash paid was 58.6% of the total consideration, or $79.1 million.

i.                       The Bruker Optics optionholders and minority Bruker Optics stockholders received a cash payment as required under the stock purchase agreement with one minority stockholder receiving $0.4 million in Bruker BioSciences common stock. The Bruker Optics optionholders and minority stockholders received an aggregate of approximately $5.2 million.

ii.                    The affiliated majority Bruker Optics stockholders elected to receive a combination of cash and stock. The percentage of cash and stock varied for each of the individual affiliated Bruker Optics majority stockholders. The trailing average of Bruker BioSciences closing prices per share, as reported in The Wall Street Journal, for the period of ten (10) consecutive trading days ending three (3) days prior to the closing date was $4.91 per share at the consummation of the transaction. The affiliated Bruker Optics majority stockholders and one Bruker Optics minority stockholder received 11.4 million shares of Bruker BioSciences common stock valued at $55.9 million, and the remainder of the consideration, $75.5 million, in cash.

iii.                 The Company borrowed $20 million under a revolving credit facility to partially finance the acquisition of Bruker Optics, which increased our long-term debt at the date of the acquisition.

(b)               Adjustments to record the pro rata allocation of the purchase price to the net assets of Bruker Optics for the portion of the transaction subject to purchase accounting are as follows:

Cash paid to Bruker Optics optionholders and minority stockholders (see note 3a)		$	5,200
Pro-rata portion of estimated acquisition related costs incurred by Bruker Biosciences related to the Bruker Optics optionholders and minority stockholders ($5,483 x 4.10%)		225
Estimated purchase price for minority interest		$	5,425
Estimated fair value of identifiable net assets acquired		$	1,166
Excess purchase price over net assets acquired		$	4,259

 

(c)                Adjustment to record an accrual for remaining estimated acquisition related costs of $1,585 related to the acquisition.  Prior to June 30, 2006, acquisition related costs of $3,898 were already paid, and accordingly, are not accrued for as of June 30, 2006. The accrued costs include investment banking, legal and valuation fees.

(d)               Adjustment to reflect the $0.01 per share par value associated with the 11.4 million additional shares of Bruker BioSciences common stock issued to certain Bruker Optics stockholders in connection with the acquisition, less the elimination of Bruker Optics common stock par value.

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(e)                   Adjustment to reflect the additional paid in capital associated with the additional shares of Bruker BioSciences common stock issued to certain Bruker Optics stockholders in connection with the acquisition, offset by a deemed dividend to the affiliated stockholders.

(f)                  Adjustment to establish a valuation allowance for the U.S. deferred tax assets of Bruker Optics.

4.                   Pro Forma Adjustments to the Unaudited Pro Forma Condensed Combined Statements of Operations

The Unaudited Pro Forma Condensed Combined Statements of Operations give effect to the acquisition of Bruker Optics as if it occurred on January 1, 2003. Pro forma adjustments have been made and are described below (in thousands):

(a)                Adjustment reflects the amortization expense associated with identified amortizable intangible assets resulting from the acquisition of Bruker Optics. For the total excess purchase price of $4,259, the estimated value of amortizable intangible assets allocated to the minority stockholders is $2,796 and the estimated useful life is 5 years, resulting in annual amortization of $559 and amortization of $280 for six month periods. The remaining excess purchase price of $1,463 was allocated to goodwill. The current allocation is preliminary and was prepared by a third party valuation firm.

(b)               Bruker BioSciences estimates total costs of $5,483 related to the acquisition of Bruker Optics. These costs include investment banking, legal and valuation fees as well as a success fee payable to the chief executive officer of Bruker Optics. The acquisition related costs are required to be expensed except for the costs related to the portion of the transaction subject to purchase accounting, which is estimated to be $225. During the six months ended June 30, 2006, Bruker BioSciences and Bruker Optics incurred and expensed $4,868 of these acquisition related costs and recorded an income tax benefit of $900 associated with certain of these costs. These costs and the income tax benefit were removed as part of the pro forma adjustments as they are material, non-recurring charges directly related to the acquisition.

(c)                Adjustment reflects the impact of:

·        A reduction of interest income related to the cash consideration for the acquisition and estimated transaction costs, which are expected to total $64.6 million in the aggregate. The Company estimates that it receives an average interest rate of 3% earned on cash and short-term investments, which results in a reduction to interest income of $1,938 on an annual basis and $969 for six month periods.

·        An increase in interest expense associated with the anticipated revolving credit facility. The Company borrowed $20 million at approximately 7.5% to finance a portion of the Bruker Optics acquisition, which results in an increase in interest expense of $1,500 on an annual basis and $750 for six month periods.

(d)               The change in basic and diluted average shares outstanding reflects the adjustment for the additional shares of Bruker BioSciences common stock issued to certain stockholders of Bruker Optics upon consummation of the transaction. The trailing average of Bruker BioSciences closing prices per share, as reported in The Wall Street Journal, for the period of ten (10) consecutive trading days ending three (3) days prior to the closing date was $4.91 per share, which resulted in the issuance of an additional 11.4 million shares of Bruker BioSciences common stock.

NOTE: The pro forma adjustments are not tax effected because Bruker BioSciences is in a net tax loss position for U.S. income tax purposes as of the end of each period.

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(c)               Exhibits

23.1         Consent of Ernst & Young LLP, Independent Auditors

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		BRUKER BIOSCIENCES CORPORATION
		(Registrant)
Date: September 14, 2006		By:	/s/ Frank H. Laukien, Ph.D.
			Frank H. Laukien, Ph.D.
			Chief Executive Officer and President

 

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