Acquisition On February 27, 2019, the Company acquired 80.1% of the issued and outstanding shares of capital stock of FTT Inc., and 80.1% of the membership interests in FTT Core for an aggregate purchase price of approximately $60 million . The purchase price was $33 million in cash, with approximately $17.7 million paid at close and approximately $15.3 million to be paid over a three -year period, subject to adjustments for transaction expenses, indebtedness, cash on hand, certain amounts payable or potentially payable to employees of FTT and post-closing working capital adjustments, and 1,825,406 shares of common stock (with a value of approximately $27 million ). FTT is a leading turbomachinery design and manufacturing company specializing in engineering, development, and testing of gas turbines, propulsion components, and systems for military and commercial applications. FTT is now the KTT Division, which is focused on the development and production of small, affordable, high-performance, jet engines for the next generation of tactical weapon systems and tactical jet UAS. The KTT Division is included in the KGS Segment. The excess of the purchase price over the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed in the acquisition was allocated to goodwill. The goodwill represents the value the Company expects to be created by enabling it to accelerate FTTs small engine development programs, and facilitate integration of these leading-edge engine solutions with evolving Kratos tactical systems. Simultaneously with the execution of the Purchase Agreement among the Company and the Sellers (as defined in such agreement) (the Purchase Agreement) and completion of the acquisition, the Company, FTT Inc., FTT Core and the Sellers entered into an exchange agreement (the Exchange Agreement) pursuant to which, among other things, (i) FTT Core was converted into a Delaware corporation, (ii) beginning in January 2024, the Holders (as defined in the Exchange Agreement) will have an annual right (the Put Right) to sell all of the minority interests in FTT Inc. and FTT Core (the Minority Interests) to the Company at a purchase price based on an assumed enterprise value of 12 times the trailing 12 months EBITDA of FTT Inc., FTT Core and each of their respective subsidiaries (the Acquired Companies), subject to adjustment as set forth in the Exchange Agreement (the Minority Interest Purchase Price) (provided, however, that following certain events, including a change of control, the Put Right will be accelerated and the Minority Interest Purchase Price will be increased to 14 times the trailing 12 months EBITDA of the Acquired Companies), and (iii) beginning in January 2025, the Company will have an annual right to purchase all of the Minority Interests from the Holders at the Minority Interest Purchase Price. The transaction has been accounted for using the acquisition method of accounting, which requires, among other things, that the assets acquired, the liabilities assumed, and the noncontrolling interest be recognized at their fair values as of the acquisition date. The fair value measurements are based primarily on significant inputs not observable in the marketplace and thus represent Level 3 measurements. The following table summarizes the provisional allocation of the purchase price over the estimated fair values of the major assets acquired, liabilities assumed, and noncontrolling interest (in millions): Accounts receivable $ 7.3 Unbilled receivables 4.9 Inventoried costs 11.7 Other current assets 1.3 Property and equipment 9.7 Intangible assets 19.8 Goodwill 29.3 Total identifiable net assets acquired 84.0 Total identifiable net liabilities assumed (9.0 ) Net assets before noncontrolling interest 75.0 Noncontrolling interest (15.0 ) Net assets acquired, excluding cash $ 60.0 As of February 27, 2019, net liabilities include $7.7 million of current liabilities and $1.3 million of long-term liabilities. There was no contingent purchase consideration associated with the acquisition of an 80.1% majority interest in FTT. The amounts above represent the provisional fair value estimates as of March 31, 2019 and are subject to subsequent adjustment as the Company obtains additional information during the measurement period and finalizes its fair value estimates. If an adjustment to the provisional amounts recognized is subsequently identified during the measurement period, the Company will recognize the adjustment in the reporting period in which the adjustment amount is determined, including recording cumulative catch-up changes to depreciation, amortization, or other income statement effects recognized in completing the initial accounting. The provisional identifiable intangible asset estimates include customer relationships of $11.2 million with a useful life of 10 years, in-process research and development of $6.0 million that will commence amortization at the completion of the development project, backlog of $2.2 million with a useful life of 2 years, and trade name of $0.4 million with a useful life of 1 year. Any subsequent adjustments to these fair value estimates occurring during the measurement period will result in an adjustment to goodwill. The Company also established a deferred tax liability of $4.4 million for the increase in the financial statement basis of the acquired assets of FTT and a corresponding increase in goodwill. The goodwill recorded in this transaction is not expected to be tax-deductible. The amounts of revenue and operating income of FTT included in the Company's condensed consolidated statement of operations for the three months ended June 30, 2019 are $17.2 million and $1.6 million , respectively. The amounts of revenue and operating income of FTT included in the Company's condensed consolidated statement of operations for the six months ended June 30, 2019 are $21.4 million and $1.7 million , respectively. Included in the merger and acquisition expenses, for the three and six months ended June 30, 2019 are transaction expenses of $0.1 million and $1.3 million , respectively, related to the acquisition of FTT. A summary of the consideration paid for the acquired ownership in FTT is as follow: Cash paid $ 20.7 Deferred purchase consideration 15.3 Common stock issued 27.0 63.0 Less: Cash acquired (3.0 ) Total consideration $ 60.0 Pro Forma Financial Information The following tables summarize the supplemental condensed consolidated statements of operations information on an unaudited pro forma basis as if the acquisition of FTT occurred on December 31, 2018 and include adjustments that were directly attributable to the foregoing transactions. There are no material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The pro forma results are for illustrative purposes only for the applicable period and do not purport to be indicative of the actual results that would have occurred had the transaction been completed as of the beginning of the period, nor are they indicative of results of operations that may occur in the future (all amounts, except per share amounts are in millions): For the six months ended June 30, 2019 (in millions): Pro forma revenues $ 356.4 Pro forma net income before tax $ 5.1 Pro forma net income $ 6.5 Pro forma net income attributable to Kratos $ 6.3 Basic pro forma income per share attributable to Kratos $ 0.06 Diluted pro forma income per share attributable to Kratos $ 0.06 The pro forma financial information reflects pro forma adjustments for the additional amortization of $0.5 million associated with finite-lived intangible assets acquired. The weighted average common shares used to calculate income per share also reflect the issuance of 1,825,406 shares of our common stock in conjunction with the acquisition. Comparable amounts for the three months ended June 30, 2019 are not presented as the results for FTT for the quarter were fully included in the condensed consolidated financial statements.