19) Acquisitions

Max-Viz, Inc.

On July 30, 2012 we completed a business combination within our aerospace segment. We acquired by merger, 100% of the stock of Max-Viz, Inc. (“Max-Viz”), a manufacturer of industry-leading Enhanced Vision Systems for defense and commercial aerospace applications for the purpose of improving situational awareness. The addition of Max-Viz diversifies the products and technologies that the Company offers. We purchased the outstanding stock of Max-Viz for $10.7 million in cash plus contingent purchase consideration up to a maximum of $8.0 million subject to meeting certain revenue growth targets over the next three years. Max-Viz’s unaudited 2012 revenue through the acquisition date was approximately $5.4 million.

The additional contingent purchase consideration was recorded at its estimated fair value at the date of acquisition based upon the Company’s assessment of the probability of Max-Viz achieving the revenue growth targets. The estimated fair value of this contingent consideration is insignificant. The goodwill recognized is comprised primarily of intangible assets that do not require separate recognition. Substantially all of the goodwill and purchased intangible assets are expected to be deductible for tax purposes over 15 years. The purchase price allocation for this 2012 acquisition is complete.

Peco, Inc.

On May 28, 2013, the Company entered into a Stock Purchase Agreement (the “Agreement”) by and among the Company and Peco, Inc., an Oregon corporation, (“Peco”) pursuant to which the Company has agreed to acquire all of the issued and outstanding capital stock of Peco. The business combination was completed July 18, 2013. Peco is a designer and manufacturer of highly engineered commercial aerospace interior components and systems for the aerospace industry. Peco is part of the Company’s Aerospace segment.

Under the terms of the Agreement, the consideration for the stock of Peco is $136.0 million in cash. The initial accounting for the acquisition of Peco was prepared based upon preliminary estimates. The preparation of certain supplemental pro forma information will be finalized once the accounting for the acquisition is completed.

The preliminary allocation of the purchase price paid for Peco is based on fair values of the acquired assets and liabilities assumed of Peco as of July 18, 2013.

The preliminary allocation of the purchase price based on appraised fair values is estimated as follows (in thousands):

The amounts allocated to the purchased intangible assets consist of the following (in thousands):

Goodwill and other intangible assets reflected above were determined to meet the criterion for recognition apart from tangible assets acquired and liabilities assumed. The goodwill is primarily attributable to expected synergies and the assembled workforce. Purchased intangible assets and goodwill are not expected to be deductible for tax purposes.

The following is a summary of the sales and amounts included in income from operations for Peco included in the consolidated financial statements of the Company from the date of acquisition to September 28, 2013 (in thousands):

The following summary, prepared on a pro forma basis, combines the consolidated results of operations of the Company with those of the acquired business as if the acquisition took place on January 1, 2012. The pro forma consolidated results include the impact of certain adjustments, including increased interest expense on acquisition debt, amortization of purchased intangible assets and income taxes.

The pro forma results are not necessarily indicative of what actually would have occurred if the acquisition had been in effect for the three months and nine months ended September 28, 2013. The pro forma results are not intended to be a projection of future results.

AeroSat, Inc.

Subsequent to the end of the third quarter on October 1, 2013, the Company entered into an agreement to acquire certain assets and liabilities of AeroSat, Inc. (“AeroSat”) a New Hampshire corporation and related entities for $12.0 million plus contingent consideration up to a maximum earn out of $53.0 million. An earn out begins to be payable if sales in 2014 exceed $30.0 million and if sales in 2015 exceed $40.0 million (the base sales level). The contingent consideration is based on a formula that is approximately 15% of sales in excess of the base sales level for each year. AeroSat is an equipment manufacturer of WIFI antenna systems for aircraft. AeroSat will be reported in the Company’s Aerospace segment.

PGA Electronic, SA

Subsequent to the end of the third quarter on November 4, 2013, the Company entered into an agreement to acquire all of the issued and outstanding capital stock of PGA Electronic, SA, (“PGA”) a French corporation for €21.4 million, (approximately $28.0 million) which will be paid in a combination of approximately 60% cash and 40% in Astronics common stock. PGA is an equipment manufacturer in the field of motion, lighting, in-flight entertainment and communications systems and cabin management systems dedicated to the aircraft cabins. PGA is expected to be part of the Company’s Aerospace segment.