NOTE M – Acquisitions

Westerman, Inc.

On September 17, 2012, we acquired 100% of the outstanding common shares of Westerman, Inc. (“Westerman”) for cash consideration of approximately $62,749,000 and the assumption of approximately $7,251,000 of debt, which was repaid at closing. Westerman is a leading manufacturer of tanks and pressure vessels for the oil and gas and nuclear markets as well as hoists for marine applications. The acquired net assets became part of our Pressure Cylinders operating segment upon closing.

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 Westerman, we identified and valued the following identifiable intangible assets:


(in thousands)			Useful Life
Category	Amount		(Years)
Customer relationships	$	12,796		10
Trade name		2,986		3-4
Non-compete agreement		1,050		5
Other		1,486		1-3

Total acquired identifiable intangible assets	$	18,318

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, which is not expected to be deductible for income tax purposes.

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


(in thousands)
Cash and cash equivalents	$	639
Accounts receivable		6,355
Inventories		15,377
Prepaid expenses and other current assets		836
Intangible assets		18,318
Property, plant and equipment		23,503

Total identifiable assets		65,028
Accounts payable		(3,024	)
Accrued liabilities		(2,479	)
Other current liabilities		(765	)
Short-term borrowings		(7,251	)
Deferred income taxes		(11,039	)

Net identifiable assets		40,470
Goodwill		22,279

Total cash consideration	$	62,749

Operating results of Westerman 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 2012, would not be materially different than reported results.