Acquisition

Acquisition of Pine State Convenience

On June 6, 2016, the Company acquired substantially all of the assets of Pine State Convenience ("Pine State"), a division of Pine State Trading Company, located in Gardiner, Maine. The acquisition was accounted for as a business combination in accordance with ASC 805 - Business Combinations. The acquisition increased the Company’s market presence primarily in the Northeastern U.S. and further enhanced the Company’s ability to cost effectively service national and regional retailers. The total purchase consideration was $88.4 million which was paid at closing and funded through borrowings under the Company's revolving credit facility.

The following table presents the assets acquired and liabilities assumed, based on their fair values and purchase consideration (in millions):



	June 6, 2016
Accounts receivable	$	35.5
Inventories	21.2
Deposits and prepayments, and other	0.9
Property and equipment	10.3
Goodwill	13.1
Other intangible assets	10.2
Less: Accrued liabilities, and other	(2.8		)
Total consideration	$	88.4

The Company determined the estimated fair values of intangible assets acquired with the assistance of independent valuation consultants. The Company finalized its valuation of its beginning goodwill and intangible assets during the fourth quarter ended December 31, 2016. Based on the valuation, intangible assets acquired include the following (in millions):



	Fair Value		Useful Life in Years
Customer relationships	$	7.2	12
Non-competition agreements	1.9		5
Trade names	1.0		2
Favorable lease terms	0.1		2
Total intangible assets	$	10.2

The results of Pine State operations have been included in the Company’s consolidated financial statements since the date of acquisition. The Company incurred $2.2 million of acquisition-related costs, which are included in selling, general and administrative expenses for the year ended December 31, 2016. The Company did not consider the Pine State acquisition to be a material business combination and therefore has not disclosed pro-forma results of operations for the acquired business. Simultaneously with the closing of the acquisition, the Company entered into two operating lease arrangements with certain former owners of Pine State. One operating lease bears a fifteen year term for a facility in Maine and the second operating lease bears a two year term for a facility in Vermont.

Acquisition of Karrys Bros., Limited.

On February 23, 2015, the Company acquired substantially all of the assets of Karrys Bros., Limited (“Karrys Bros.”), a regional convenience wholesaler servicing customers in Ontario, Canada, and the surrounding provinces, for cash consideration of approximately $8.0 million, or $10.0 million (Canadian dollars). Transaction and integration costs in connection with the acquisition of Karrys Bros. were approximately $1.7 million for the year ended December 31, 2015. The Karrys Bros. operations have been integrated into the Company’s existing distribution center in Toronto and have provided the Company with the opportunity to increase its market share in eastern Canada. The results of operations of Karrys Bros. have been included in the Company’s consolidated statements of operations and comprehensive income since the date of acquisition. The Company did not consider the Karrys Bros. acquisition to be a material business combination and therefore has not disclosed pro-forma results of operations for the acquired business.