Acquisition of Feminine Care Brands

3 Months Ended

Dec. 31, 2013

Business Combinations [Abstract]

Acquisition of Feminine Care Brands

Acquisition of Feminine Care Brands

In October 2013, the Company completed the acquisition of the Stayfree pad, Carefree liner and o.b. tampon feminine care brands in the U.S., Canada and the Caribbean from Johnson & Johnson for an aggregate cash purchase price of approximately $185. The purchase price is subject to a working capital adjustment, which is expected to be finalized during the second quarter. The Company financed the feminine care acquisition with available foreign cash of approximately $135 and $50 obtained from borrowings under the Company’s available debt facilities. Liabilities assumed as a result of the feminine care acquisition are limited primarily to certain employee benefit obligations. The Company expects to combine these acquired brands within its existing feminine care business in the Personal Care segment. Combining these complementary businesses with our existing feminine care products provides the Company with brands in each of the key feminine hygiene categories. There are no contingent payments, options or commitments associated with the feminine care acquisition.

The Company has developed a preliminary estimate of the fair values of assets acquired and liabilities assumed for purposes of allocating the purchase price, but this is subject to change as we complete our valuation activities. The purchase price allocation is not complete due to the timing of the acquisition and is expected to be finalized by March 31, 2014. For purposes of the preliminary allocation, the Company has estimated a fair value adjustment for inventory based on the estimated selling price of the finished goods acquired at the closing date less the sum of (a) costs of disposal and (b) a reasonable profit allowance for the selling effort of the acquiring entity. The preliminary fair value adjustment for the acquired equipment was established using a cost and market approach. The fair values of the identifiable intangible assets were estimated using various valuation methods including discounted cash flows using both an income and cost approach.

The estimated value for assets acquired and liabilities assumed will be adjusted when the final purchase price allocations are complete. Any changes to the preliminary estimates of the fair value of assets acquired and liabilities assumed, some of which may be material, will be allocated to residual goodwill and reflected from the feminine care acquisition date.

At December 31, 2013, the preliminary allocation of the purchase price is as follows:

Inventories	$	44.4
Intangible assets	44.3
Other assets	7.2
Property, plant and equipment,net	114.2
Other liabilities	(4.5		)
Pension/Other post-retirement benefits	(20.3		)
Net assets acquired	$	185.3

The Company expects this transaction will generate little to no goodwill. At this time, intangible assets acquired are assumed to be indefinite-lived intangible assets related to the acquired tradenames and would be fully allocated to the Personal Care segment.

Upon completion of the valuation, and if identified, all or a portion of intangibles and goodwill will be deductible for tax purposes and amortized over 14 to 15 years, depending on the statutory jurisdiction.

Proforma revenue and operating results for the feminine care acquisition are not included as they are not considered material to the Consolidated Financial Statements.