Business Combinations (Notes)

6 Months Ended

Jun. 29, 2019

Business Combination Disclosure [Text Block]

BUSINESS ACQUISITIONS

On April 30, 2019, the Company acquired assets and assumed liabilities from Sportlab S.R.L, a distributor of Saucony^® footwear in Italy. Total purchase consideration of $25.1 million includes cash paid, extinguishment of Sportlab’s accounts payable balance that was due to the Company at the time of acquisition and contingent consideration. The contingent consideration is based on sales activity from the date of the acquisition through the remainder of fiscal 2019 and is valued based on the order backlog at the acquisition date. The maximum amount of contingent consideration for which the Company would be liable is $5.7 million and if earned, would be paid in the first quarter of fiscal 2020. The detailed amounts of each component of the purchase consideration are as follows:



(In millions)	Purchase Consideration
Cash paid	$	15.1
Extinguishment of Sportlab’s accounts payable balance	4.6
Contingent consideration	5.4
Total purchase consideration	$	25.1

The Company accounted for the acquisition under the provisions of FASB ASC Topic 805, Business Combinations. The related assets acquired and liabilities assumed were recorded at fair value on the acquisition date. The operating results for the acquired Saucony^® distribution business are included in the Company’s consolidated condensed results of operations beginning April 30, 2019, and are included in the Wolverine Boston Group reporting group for segment reporting purposes.

The preliminary allocation of the purchase price through June 29, 2019 was:



(In millions)	Initial Valuation
Accounts receivable	$	1.8
Inventories	6.5
Goodwill	12.0
Amortizable intangibles	12.9
Total assets acquired	33.2
Deferred income taxes	3.6
Other liabilities	4.5
Total liabilities assumed	8.1
Net assets acquired	$	25.1

The allocation of the purchase price above is considered preliminary and was based upon valuation information available and estimates and assumptions made at June 29, 2019. The Company is still in the process of verifying data and finalizing information related to the valuation and recording of identifiable intangible assets, uncertain tax positions, remaining contingent consideration and the resulting effects on the amount of recorded goodwill.

The excess of the purchase price over the fair value of the net assets acquired, amounting to $12.0 million, was preliminarily recorded as goodwill in the condensed consolidated balance sheet and was assigned to the Wolverine Boston Group operating segment. The goodwill that was recognized is attributable to the efficiencies to be gained by integrating operations with the Saucony^® distribution business purchased from Sportlab. Other intangible assets acquired include order backlog, valued at $1.7 million, and customer relationship assets, valued at $11.2 million, which has have estimated useful lives of 7 months and 14 years, respectively.