4. ACQUISITIONS

Alpine Valley Bread Company

On October 13, 2015, the company completed the acquisition of 100% of the capital stock of Alpine Valley Bread Company (“Alpine”), a leading organic bread baker, from its shareholders for total consideration of approximately $121.9 million inclusive of payments for certain tax benefits. We paid cash of $109.3 million and issued 481,540 shares of our common stock to the sellers in a private placement. Alpine operates two production facilities in Mesa, Arizona and has widespread distribution across the U.S. The Alpine acquisition has been accounted for as a business combination and is included in our Warehouse Segment. The results of Alpine’s operations were included in the company’s Condensed Consolidated Financial Statements beginning on October 14, 2015. The total preliminary goodwill recorded for this acquisition was $36.0 million and it is deductible for tax purposes.

During fiscal 2015, the company incurred $1.6 million of acquisition-related costs for Alpine. The acquisition-related costs for Alpine were recorded in the selling, distribution and administrative expense line item in our Condensed Consolidated Statements of Income. Alpine contributed $11.9 million in sales during fiscal 2015. Alpine’s operating income since the acquisition was immaterial to our fiscal 2015 results of operations.

The following table summarizes the consideration paid for Alpine based on the fair value at the acquisition date. This table is based on preliminary valuations for the assets acquired and liabilities assumed. The identifiable intangible assets, property, plant and equipment, and certain financial assets and taxes are still under review. We will continue reviewing the final recognized amounts of identifiable assets acquired and liabilities assumed until the fourth quarter of our fiscal 2016 when the allocation will be final (amounts in thousands):

Fair Value of consideration transferred:
Cash consideration paid	$	109,340
Stock consideration paid		12,602
Total consideration paid		121,942

Recognized amounts of identifiable assets acquired and liabilities assumed:
Property, plant, and equipment		15,614
Identifiable intangible assets		64,600
Financial assets		5,687
Net recognized amounts of identifiable assets acquired		85,901
Goodwill	$	36,041

The following table presents the acquired intangible assets subject to amortization (amounts in thousands, except amortization periods):

	Total		Weighted average amortization years		Attribution Method
Trademarks	$	20,900		40.0	Straight-line
Customer relationships		43,700		25.0	Sum of year digits
	$	64,600		29.9

The fair value of trade receivables is $4.8 million with an immaterial amount determined to be uncollectible. We did not acquire any other class of receivables as a result of the acquisition.

Dave’s Killer Bread

On September 12, 2015, the company completed the acquisition of 100% of the capital stock of Dave’s Killer Bread (“DKB”), the nation’s best-selling organic bread, from its shareholders for total cash payments of approximately $282.1 million inclusive of payments for certain tax benefits. DKB operates one production facility in Milwaukie, Oregon and has widespread distribution across the U.S. We believe the acquisition of DKB strengthens our position as the second-largest baker in the U.S. by giving us access to the fast growing organic bread category and expanding our geographic reach into the Pacific Northwest. The DKB acquisition has been accounted for as a business combination and is included in our DSD Segment. The results of DKB’s operations are included in the company’s Condensed Consolidated Financial Statements beginning on September 13, 2015. The total preliminary goodwill recorded for this acquisition was $145.9 million and it is not deductible for tax purposes.

During fiscal 2015, the company incurred $4.6 million of acquisition-related costs for DKB. The acquisition-related costs for DKB were recorded in the selling, distribution and administrative expense line item in our Condensed Consolidated Statements of Income. DKB contributed $37.6 million in sales during fiscal 2015. DKB’s operating income since the acquisition was immaterial to our fiscal 2015 results of operations.

The following table summarizes the consideration paid for DKB based on the fair value at the acquisition date. This table is based on preliminary valuations for the assets acquired and liabilities assumed. The identifiable intangible assets, property, plant and equipment, and certain financial assets and taxes are still under review. We will also continue reviewing the final recognized amounts of identifiable assets acquired and liabilities assumed until the third quarter of our fiscal 2016 when the allocation will be final (amounts in thousands):

Fair Value of consideration transferred:
Cash consideration paid	$	282,115

Recognized amounts of identifiable assets acquired and liabilities assumed:
Property, plant, and equipment		9,769
Identifiable intangible assets		176,300
Deferred income taxes		(60,142	)
Financial assets		10,263
Net recognized amounts of identifiable assets acquired		136,190
Goodwill	$	145,925

The following table presents the acquired intangible assets subject to amortization (amounts in thousands, except amortization periods):

	Total		Weighted average amortization years		Attribution Method
Trademarks	$	107,700		40.0	Straight-line
Customer relationships		68,000		25.0	Sum of year digits
Non-compete agreements		600		2.0	Straight-line
	$	176,300		34.1

The fair value of trade receivables is $14.2 million. The gross amount of the receivable is $14.4 million of which $0.2 million is determined to be uncollectible. We did not acquire any other class of receivables as a result of the acquisition.

Unaudited pro forma consolidated results of operations for the Alpine and DKB acquisitions are not included because the company determined that they are immaterial.