Acquisitions

On February 22, 2013, the Company, through an indirect wholly-owned foreign subsidiary, acquired certain assets and assumed certain liabilities of Gefen Distribution Verwaltungs GmbH ("Gefen Distribution") for total consideration of approximately $2.9 million, consisting of cash payments of approximately $0.9 million, a holdback amount of approximately $0.2 million to be paid 18 months subsequent to the closing of the acquisition, and the settlement of a receivable due from Gefen Distribution to the Company as of the acquisition date of approximately $1.8 million. Gefen Distribution is the principal distributor of Gefen products in Europe and the acquisition expands the Company's European distribution of the Company's products. Gefen Distribution is included in the Company's Technology Solutions ("TECH") segment. The acquisition of Gefen Distribution contributed approximately $0.5 million to net sales and contributed operating losses of approximately $0.2 million (including depreciation and amortization of approximately $0.2 million) for the first quarter of 2013. The Company has made preliminary estimates of the purchase price and the fair value of the acquired assets and liabilities utilizing information available at the time that the Company's consolidated financial statements were prepared. These estimates are subject to refinement until all pertinent information has been obtained. Pro forma results related to the acquisition of Gefen Distribution have not been presented, as the effect is not significant to the Company's consolidated operating results.

On April 1, 2013, the Company acquired all of the outstanding common stock of 2GIG Technologies, Inc. (“2GIG”) from APX Group, Inc. for $135 million, plus an additional amount of approximately $12.3 million calculated based upon 2GIG's estimated closing working capital, which is subject to further post-closing adjustment, and the settlement of a receivable due from 2GIG to the Company as of the acquisition date of approximately $15.3 million. 2GIG is an innovative designer and supplier of residential security and home automation systems. Developed with the assistance of Nortek's Linear® business, 2GIG's Go!Control™ touch-screen panel is an industry-leading, self-contained, all-in-one home security and automation control panel. 2GIG also provides wireless interactive home security services and a wide range of peripheral hardware devices and system components for home security and automation solutions. The acquisition of 2GIG positions the Company's TECH segment as one of the world's top-tier hardware developers and manufacturers in the growing residential security and home automation markets. The results of 2GIG have not been included in any of the periods presented and 2GIG will be included in the Company's TECH segment.

The unaudited pro forma net sales, operating earnings, net loss, basic and diluted loss per share, and depreciation and amortization expense for the Company as a result of the acquisition of 2GIG for the first quarter of 2013 and 2012 were as follows:



	For the first quarter of
	2013			2012
	(Dollar amounts in millions)
Net sales	$	551.1		$	527.8
Operating earnings	11.7			17.9
Net loss	(11.1		)	(6.0		)
Basic earnings (loss) per share	(0.72		)	(0.40		)
Diluted earnings (loss) per share	(0.72		)	(0.40		)
Depreciation & amortization expense	23.6			24.8

These amounts were determined assuming that the acquisition of 2GIG had occurred on January 1, 2012 and include the historical results of 2GIG for the first quarter of 2013 and 2012 as well as preliminary pro forma adjustments to reflect (i) the elimination of intercompany transactions between the Company and 2GIG, (ii) additional depreciation and amortization expense related to the preliminary allocation of the purchase price, which is subject to change as the Company completes its review and appraisal work, (iii) increased interest expense related to the amounts borrowed to fund the acquisition and (iv) other pro forma adjustments that the Company considered appropriate related to the acquisition of 2GIG. The transaction costs of approximately $0.7 million related to the acquisition of 2GIG for the first quarter of 2013 have been excluded from the unaudited pro forma operating earnings, net loss, and basic and diluted loss per share. These preliminary pro forma amounts are not necessarily indicative of the amounts that would have been achieved had the acquisition taken place as of January 1, 2012, nor are they necessarily indicative of the results for future periods. These preliminary pro forma financial statements are subject to change as additional information becomes available.