Acquisitions

12 Months Ended

Nov. 30, 2018

Business Combination Disclosure [Text Block]

Acquisitions

Resiquimica

On September 25, 2018, the Company acquired all of the outstanding shares of Resiquimica S.A. and certain related entities ("Resiquimica") from Socer - Imobiliaria e Investimentos, S.A. Resiquimica is a Portugal-based producer of polymers and resins for coatings and construction applications in Europe, Middle East and Africa ("EMEA"). Resiquimica, with approximately €56.0 million in annual sales, brings new technology, expanded product portfolio and a manufacturing base in Sintra, Portugal, which will provide production flexibility in the EMEA region. The total purchase price for Resiquimica was €21.8 million ($25.6 million), net of acquired cash plus debt assumed of $9.8 million. Cash payments were primarily funded with cash on hand and borrowings on the Facility. Of the total purchase price, $22.8 million was paid in fiscal 2018, and $2.8 million was paid subsequently in December 2018. Resiquimica's results are included within the Specialty Solutions segment. The debt assumed was subsequently paid in full and the related cash flows are reflected as financing cash flows within the Consolidated Statement of Cash Flows.

The information included herein has been prepared based on the allocation of the purchase price using estimates of the fair value of assets acquired and liabilities assumed which were determined with the assistance of independent valuations using discounted cash flow and comparative market multiple approaches, quoted market prices and estimates made by management. The purchase price allocation is subject to further adjustment until all pertinent information regarding the assets and liabilities acquired are fully evaluated by the Company, not to exceed one year as permitted under ASC 805, Business Combinations.

The following table presents the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition:



Assets acquired:	(Dollars in millions)
Accounts receivable	$	20.0
Inventories	8.8
Prepaid expenses and other	0.5
Property, plant, and equipment	13.7
Intangible assets	3.5
Goodwill	6.4
Total assets acquired	52.9
Liabilities assumed:
Accounts payable	11.5
Accrued payroll and personal property taxes	1.7
Other current liabilities	1.2
Deferred income taxes	3.1
Total liabilities assumed	17.5
Net assets acquired	$	35.4

The Company recorded acquired intangible assets of $3.5 million, with an estimated weighted-average useful life of 9.1 years. These intangible assets include customer lists of $1.1 million, technical know-how of $0.9 million, and trademarks of $1.5 million, with estimated weighted-average useful lives ranging from 7 to 10 years.

The Company incurred $2.1 million of acquisition-related costs for Resiquimica, which have been included in acquisition and integration related expense within the consolidated statements of operations. The gross contractual amount of accounts receivable acquired was $20.3 million. The Company repaid the acquired debt of $9.8 million within 60 days of the acquisition date.

Goodwill is calculated as the excess of the purchase price over the estimated fair values of the assets acquired and the liabilities assumed in the acquisition, and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The amount allocated to goodwill is primarily the result of anticipated synergies resulting from the consolidation of sales, logistics, and purchasing activities, as well as the elimination of duplicate administrative costs. This goodwill has been allocated to the Company's Specialty Solutions segment and is not deductible for income tax purposes.