Acquisitions

12 Months Ended

Dec. 27, 2019

On February 26, 2018, we completed the acquisition of 100% of the voting interests of Mann Packing Company, Inc and subsidiaries ("Mann Packing"). The results of Mann Packing's operations have been included in our consolidated financial statements since that date.

We purchased all of Mann Packing's outstanding capital stock for an aggregate consideration of $357.2 million funded by a $229.7 million three-day promissory note and $127.5 million in cash. The three-day promissory note was settled with cash on hand and borrowings under our Credit Facility.

We acquired net assets of $357.2 million, including a put option exercisable by the 25% noncontrolling interest shareholder of one of the acquired subsidiaries. The fair value of the redeemable noncontrolling interest at acquisition date is $47.4 million.

At the time of acquisition, our definite-lived intangible assets relate to $115.6 million in customer lists with a weighted average amortization period of 23 years and $24.2 million of trade names and trademarks with a weighted average amortization period of 11 years.

The $162.0 million allocated to goodwill on our Consolidated Balance Sheet represents the excess of the purchase price over the value of assets acquired and liabilities assumed and is included in the fresh and value-added products segment.

We recognized $3.8 million of acquisition related costs which primarily consist of compensatory, advisory, legal, accounting, valuation, other professional and consulting fees related to the Mann Packing acquisition, and are included in asset impairment and other charges, net. Refer to Note 3. “Asset Impairment and Other Charges, Net".

4. Acquisitions (continued)

The following table summarizes the fair values of the net assets acquired and liabilities assumed at the date of the acquisition:



	December 28, 2018
Assets acquired
Current assets:
Cash and cash equivalents	$	1.4
Trade accounts receivable, net of allowance	37.0
Other accounts receivable, net of allowance	5.3
Inventories, net	23.8
Prepaid expenses and other current assets	3.9
Total current assets	71.4


Property, plant and equipment, net	96.2
Definite-lived intangible assets, net	139.8
Goodwill	162.0
Total assets acquired	$	469.4
Liabilities assumed
Current liabilities:
Accounts payable and accrued expenses	64.8
Total liabilities assumed	64.8

Less: Redeemable noncontrolling interest	47.4

Net assets acquired	$	357.2

The Mann Packing acquisition includes a put option exercisable by the 25% shareholder of one of the acquired subsidiaries. The put option allows the noncontrolling shareholder to sell its 25% noncontrolling interest to us for a multiple of the subsidiary's adjusted earnings. The noncontrolling shareholder can exercise this put option on or after April 1, 2023. Following a five-year window expiring on April 1, 2028, the put option value will be negotiated annually and the inputs are subject to change. As the put option is outside of our control, the estimated redemption value of the 25% noncontrolling interest is presented as a redeemable noncontrolling interest outside of permanent equity on our Consolidated Balance Sheets. At each reporting period, the redeemable noncontrolling interest is recognized at the higher of 1) the accumulated earnings or 2) the contractually-defined redemption value as of the balance sheet date.

4. Acquisitions (continued)

Our consolidated results include the following financial information of Mann Packing:



	Period from February 27, 2018 to December 28, 2018
Net sales	$	488.6
Net (loss) income attributable to Fresh Del Monte Produce, Inc.	$	(1.7	)

The following unaudited pro forma combined financial information presents our results including Mann Packing as if the business combination had occurred at the beginning of fiscal year 2018:



	Year ended
	December 28, 2018
Net sales	$	4,573.1

Net (loss) income attributable to Fresh Del Monte Produce, Inc.	$	(18.6	)	(1)

⁽¹⁾Unaudited pro forma results for the year ended December 28, 2018 were positively adjusted by $10.8 million consisting of $12.7 million of nonrecurring transaction related compensation benefits, advisory, legal, accounting, valuation and other professional fees, partially offset by $1.9 million of interest expense as a result of increased borrowings under our Credit Facility.