NOTE M – Acquisitions

STAKO

On September 30, 2011, we acquired 100% of the outstanding voting interests of Poland-based STAKO sp. Z o.o. ("STAKO") for cash consideration of approximately $41,500,000 and the assumption of certain liabilities. STAKO manufactures liquefied petroleum gas tanks for engines in passenger cars and commercial and delivery vehicles. The acquired net assets became part of our Pressure Cylinders operating segment upon closing of the transaction.

The assets acquired and liabilities assumed were recognized at their 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 STAKO, we identified and valued the following identifiable intangible assets:

		$0,000		$0,000
(in thousands)			Useful Life
Category	Amount		(Years)
Trade name	$	1,500		10
Customer relationships		2,500		10-15
Non-compete agreement		400		3

Total acquired identifiable intangible assets	$	4,400

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 a going-concern element that represents our ability to earn a higher rate of return on the group of assets than would be expected on the separate assets as determined during the valuation process. This additional investment value resulted in goodwill of $7,990,000, which is not expected to be deductible for income tax purposes.

The following table summarizes the consideration transferred for STAKO and the fair value assigned to the assets acquired and liabilities assumed at the acquisition date:


(in thousands)
Cash and cash equivalents	$	2,715
Accounts receivable		4,175
Inventories		6,208
Other current assets		75
Intangible assets		4,400
Other noncurrent assets		60
Property, plant and equipment		23,770

Total identifiable assets		41,403
Accounts payable		(2,813	)
Accrued liabilities		(750	)
Other liabilities		(1,890	)
Deferred income taxes		(2,440	)

Net identifiable assets		33,510
Goodwill		7,990

Total consideration paid	$	41,500

Operating results of STAKO have been included in our consolidated statements of earnings from the acquisition date, forward. Pro forma results, including the acquired business since the beginning of fiscal 2011, would not be materially different than reported results.

Bernz

On July 1, 2011, we purchased substantially all of the net assets of Bernz (excluding accounts receivable) from Irwin Industrial Tool Company, a subsidiary of Newell Rubbermaid, Inc., for cash consideration of approximately $41,000,000. Bernz is a leading manufacturer of hand held torches and accessories. The acquired net assets became part of our Pressure Cylinders operating segment upon closing of the transaction.

As more fully described in "NOTE D – Contingent Liabilities," in connection with this purchase transaction, both parties agreed to settle their litigation. In accordance with the applicable accounting guidance for the settlement of a pre-existing relationship between parties to a business combination, we recognized a settlement gain equal to the amount by which our previously recorded reserve exceeded the estimated fair value of the settlement. The components of the settlement gain are summarized in the following table:


(in thousands)
Reserve	$	14,402
Less: Fair value of settlement		(10,000	)

Settlement gain	$	4,402

The settlement gain was recognized within selling, general and administrative ("SG&A") expense in our consolidated statements of earnings to correspond with the classification of the reserves previously recognized in connection with this matter. An income approach that incorporated market participant assumptions regarding the estimate of future cash flows and the possible variations among those cash flows was used to measure fair value. In accordance with the accounting guidance for a business combination, the fair value of the settlement feature was excluded from the fair value of the consideration transferred for purposes of the purchase price allocation.

The assets acquired and liabilities assumed were recognized at their 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 Bernz, we identified and valued the following identifiable intangible assets:

		$00,000		$00,000
(in thousands)			Useful Life
Category	Amount		(Years)
Trade name	$	8,500		Indefinite
Customer relationships		10,500		9-13
Non-compete agreements		2,300		5

Total acquired identifiable intangible assets	$	21,300

Cash flows used to determine the purchase price included strategic and synergistic benefits (investment value) specific to us, which resulted in a purchase price in excess of the fair value of identifiable net assets. The purchase price also 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 in addition to a going-concern element that represents our ability to earn a higher rate of return on the group of assets than would be expected on the separate assets as determined during the valuation process. This additional investment value resulted in goodwill of $3,609,000, which is expected to be deductible for income tax purposes.

The following table summarizes the consideration transferred for Bernz and the fair value assigned to the assets acquired and liabilities assumed at the acquisition date:


(in thousands)
Inventories	$	15,313
Intangible assets		21,300
Property, plant and equipment		7,880

Total identifiable assets		44,493
Accounts payable		(6,177	)
Accrued liabilities		(925	)
Net identifiable assets		37,391
Goodwill		3,609

Total consideration paid	$	41,000

Operating results of Bernz have been included in our consolidated statements of earnings from the acquisition date, forward. Pro forma results, including the acquired business since the beginning of fiscal 2011, would not be materially different than reported results.