Acquisitions

6 Months Ended

Nov. 30, 2024

Note N – Acquisitions

On June 3, 2024, we acquired Ragasco, a leading global manufacturer of composite propane cylinders based in Norway. The total purchase price, after adjustment for final working capital, consisted of cash consideration of $101,424, of which $11,343 was on deposit at May 31, 2024, and contingent consideration in the form of an earnout agreement with an estimated acquisition date fair value of $7,139. The earnout agreement provides for additional cash consideration of up to $14,000 should certain earnings targets be met through calendar year 2024. Ragasco operates as part of the Building Products operating segment and its results have been included in our consolidated statements of earnings since the date of acquisition. Pro forma results, including the acquired business since the beginning of fiscal 2023, would not be materially different from reported results.

The assets acquired and liabilities assumed were recognized at their estimated acquisition-date fair values, with goodwill representing the excess of the purchase price over the fair value of the net identifiable assets acquired. The purchase price includes the fair values of other assets that were not identifiable, not separately recognizable under accounting rules (e.g., assembled workforce) or of immaterial value. The purchase price also includes strategic and synergistic benefits (i.e., investment value) specific to us, which resulted in a purchase price in excess of the fair value of the identifiable net assets. This additional investment value resulted in goodwill, which is not expected to be deductible for income tax purposes.

The assets acquired and liabilities assumed were recognized at their estimated acquisition-date fair values, with goodwill representing the excess of the purchase price over the fair value of the net identifiable assets acquired. In connection with the acquisition of Ragasco, we identified and valued the following intangible assets:


			Useful Life
Category	Amount		(Years)
Trade name	$	4,379	10
Technological know-how		14,659	10
Customer relationships		12,660	15
Total acquired identifiable intangible assets	$	31,698

The following table summarizes the consideration paid and the final fair value assigned to the assets and liabilities assumed at the acquisition date.


				Measurement
	Preliminary			Period			Final
	Valuation			Adjustments			Valuation
Cash and cash equivalents	$	1,925		$	-		$	1,925
Accounts receivable		8,554			-			8,554
Inventory		16,403			-			16,403
Other current assets		990			-			990
Property, plant and equipment		27,325			-			27,325
Operating lease assets		8,834			-			8,834
Deferred income taxes		365			-			365
Intangible assets		32,840			(1,142	)		31,698
Total identifiable assets		97,236			(1,142	)		96,094
Accounts payable		(4,885	)		-			(4,885	)
Current operating lease liability		(980	)		-			(980	)
Accrued expenses		(6,344	)		-			(6,344	)
Noncurrent operating lease liability		(7,886	)		-			(7,886	)
Deferred income taxes		(9,226	)		251			(8,975	)
Other liabilities		(100	)		-			(100	)
Net identifiable assets		67,815			(891	)		66,924
Goodwill		40,748			891			41,639
Total purchase price		108,563			-			108,563
Less: Fair value of earnout		7,139			-			7,139
Cash purchase price	$	101,424		$	-		$	101,424