Acquisitions (Tables)

9 Months Ended

Feb. 28, 2022

Schedule of Acquisition of Intangible Assets

In connection with the acquisition of Shiloh, the Company identified and valued the following intangible assets:

(in thousands)
Category	Amount		Useful Life (Years)
Customer relationships	$	34,500	15-20
Non-compete agreement		290		3
In-process research & development		1,300	Indefinite
Total acquired identifiable intangible assets	$	36,090

Schedule of Consideration Transferred for the Assets and the Preliminary Fair Value Assigned to Assets Acquired and Liabilities Assumed

The following table summarizes the consideration transferred and the estimated fair value assigned to the assets acquired and liabilities assumed at the acquisition date.

(in thousands)	Preliminary Valuation			Measurement Period Adjustments			Revised Valuation
Accounts receivable	$	44,191		$	-		$	44,191
Inventories		13,971			732			14,703
Property, plant and equipment		30,461			(119	)		30,342
Intangible assets		34,280			1,810			36,090
Operating lease assets		59,905			-			59,905
Total identifiable assets		182,808			2,423			185,231
Accounts payable		(44,822	)		-			(44,822	)
Current operating lease liabilities		(1,555	)		-			(1,555	)
Noncurrent operating lease liabilities		(58,350	)		-			(58,350	)
Net identifiable assets		78,081			2,423			80,504
Goodwill		26,669			(2,423	)		24,246
Purchase price	$	104,750		$	-		$	104,750

Tempel Steel Company

Schedule of Acquisition of Intangible Assets

In connection with the acquisition of Tempel, the Company identified and valued the following intangible assets:

(in thousands)
Category	Amount		Useful Life (Years)
Customer relationships	$	30,000	17
Technological know how		11,000	6-8
Total acquired identifiable intangible assets	$	41,000

Schedule of Consideration Transferred for the Assets and the Preliminary Fair Value Assigned to Assets Acquired and Liabilities Assumed

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 (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 purchase price was allocated as follows:

(in thousands)	Preliminary Valuation
Cash	$	17,098
Accounts receivable		88,672
Inventories		59,927
Other current assets		10,666
Property, plant and equipment		147,441
Intangible assets		41,000
Operating lease assets		4,098
Total identifiable assets		368,902
Accounts payable		(49,777	)
Notes payable		(6,270	)
Accrued liabilities		(17,501	)
Current operating lease liabilities		(1,614	)
Noncurrent operating lease liabilities		(2,484	)
Other non-current liabilities (1)		(40,110	)
Net identifiable assets		251,146
Goodwill		38,463
Purchase price	$	289,609

(1) Includes approximately $40,000,000 of net pension and other postretirement benefit obligations assumed as part of the Tempel acquisition.  The excess of projected benefit obligation over the fair value of plans assets was recognized as a liability in accordance with ASC 715 using key inputs including, but not limited to, discount rates and expected rates of return on plan assets.

Schedule of Unaudited Pro Forma Information

The following unaudited pro forma information presents consolidated financial information as if Tempel had been acquired at the beginning of fiscal 2021.  Depreciation and amortization expense included in the pro forma results reflect the preliminary acquisition-date fair values assigned to the definite-lived intangible assets and fixed assets of Tempel assuming a June 1, 2020 acquisition date.  Adjustments have been made to remove acquisition-related costs and the acquisition date fair value adjustment to acquired inventories.  The pro forma adjustments noted above have been adjusted for the applicable income tax impact.  The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on June 1, 2020.

	Three months ended				Nine months ended
	February 28,				February 28,
(in thousands, except per share amounts)	2022		2021		2022		2021
Net sales	$	1,378,235	$	836,553	$	3,960,792	$	2,414,865
Net earnings attributable to controlling interest	$	60,062	$	65,564	$	318,185	$	606,384
Diluted earnings per share attributable to controlling interest	$	1.19	$	1.23	$	6.21	$	11.21