ACQUISITIONS

2015 Acquisitions

CoSine Acquisition

Description of the Transaction

On January 20, 2015 ("CoSine Acquisition Date"), the Company entered into a contribution agreement (the “Contribution Agreement”) with CoSine. Pursuant to the Contribution Agreement, the Company contributed (i) 24,807,203 ordinary shares of API and (ii) 445,456 shares of common stock of Nathan’s Famous, Inc. ("Nathan's") to CoSine in exchange for 16,500,000 shares of newly issued CoSine common stock and 12,761 shares of newly issued 7.5% series B non-voting preferred stock, which increased our ownership of CoSine to approximately 80%. Prior to obtaining a controlling interest, SPLP owned approximately 48% of the outstanding shares of CoSine, and its investment was accounted for under the traditional equity method. As a result of the above transaction, CoSine became a majority-owned controlled subsidiary and is consolidated with SPLP from the CoSine Acquisition Date. Prior to CoSine's Acquisition of API, CoSine was included in the Corporate and Other segment. Beginning in the second quarter of 2015, CoSine is included in the Diversified Industrial segment.

The Contribution Agreement was the first step in a plan for a wholly owned UK subsidiary of CoSine ("BidCo") to make an offer (the “Offer”), which commenced on February 4, 2015, to acquire all of the issued and to be issued shares in API for 60 pence in cash per API share not already owned by BidCo. As a result of the Offer, BidCo owned approximately 98% of API as of March 31, 2015, however CoSine did not obtain control over the operations of API until April 17, 2015 (see the "CoSine's Acquisition of API" section below).

Fair Value of Consideration Paid

As of the CoSine Acquisition Date, the fair value of the Company's previously held equity interest and the noncontrolling interest in CoSine were valued at approximately $2.51 per share. Accordingly, the Company remeasured its previously held equity interest to a fair value of approximately $12,011, resulting in an investment gain of approximately $6,900 which is included in Net investment gains (losses) in the Consolidated Statements of Operations in the first quarter of 2015.

The table below details the consideration paid to acquire the controlling interest in CoSine:



			Fair Value of Consideration Paid
Previously held common equity of CoSine	4,779,721
Fair Value Per Share (a)	$	2.51	$	12,011

Shares of API transferred to CoSine	24,807,203
Fair Value Per Share (b)	$	0.92	22,823

Shares of Nathan's transferred to CoSine	445,456
Fair Value Per Share (c)	$	70.50	31,405
			$	66,239

(a) Based on comparable company trading multiples and discounted cash flow analysis.

(b) Represents the Offer price of 60 pence at the U.S. dollar to GBP exchange rate on the CoSine Acquisition Date.

Allocation of Consideration Paid

The following table summarizes the preliminary estimates of the fair values of the assets acquired and liabilities assumed as of the CoSine Acquisition Date as well as the fair value of the noncontrolling interest in CoSine:



	Amount
Assets:
Cash	$	17,614
Prepaid expenses and other current assets	7
Investments	54,228
Goodwill	8,295
Total assets acquired	80,144
Liabilities:
Accounts payable	280
Other accrued Liabilities	783
Total liabilities assumed	1,063
Fair value of noncontrolling interest	12,842
Net assets acquired	$	66,239

CoSine's Acquisition of API

Description of the Transaction

As discussed above, CoSine obtained control over the operations of API on April 17, 2015 ("API Acquisition Date"), at which time API became a majority-owned subsidiary of CoSine. API is a manufacturer and distributor of foils, films and laminates used to enhance the visual appeal of products and packaging. API is headquartered in Cheshire, England.

Fair Value of Consideration Paid

The table below details the consideration paid to acquire the controlling interest in API:



	Fair Value of Consideration Paid

Previously held common equity of API	$	22,861

Cash paid for additional API equity	47,866
	$	70,727

Allocation of Consideration Paid

The following table summarizes the preliminary estimates of the fair values of the assets acquired an d liabilities assumed as of the API Acquisition Date:



	Amount
Assets:
Cash	$	5,989
Trade and other receivables	24,160
Inventories	23,714
Prepaid expenses and other current assets	6,452
Property, plant and equipment	43,928
Other non-current assets	1,395
Goodwill	20,327
Other intangible assets	23,977
Total assets acquired	149,942
Liabilities:
Accounts payable	24,639
Accrued liabilities	6,025
Short-term debt	2,105
Long-term debt	23,348
Accrued pension liability	22,006
Deferred income taxes	1,092
Total liabilities assumed	79,215
Net assets acquired	$	70,727

The preliminary purchase price allocation is subject to finalization of valuations of certain acquired assets. All of the goodwill is assigned to SPLP's Diversified Industrial segment and is not expected to be deductible for income tax purposes. Other intangibles consist primarily of acquired trade names of $5,222 and customer relationships of $18,738. Based on our preliminary evaluation, the trade names have been assigned a 10-year useful life based on the long operating history, broad market recognition and continued demand for the associated brands, and customer relationships have been assigned a 7-year life based on the expected turnover of API's existing customer base. The valuation of acquired trade names was performed utilizing a relief from royalty method, and significant assumptions used in the valuation include the royalty rate assumed and the expected level of future sales. The acquired customer relationships were valued using an excess earnings approach, and significant assumptions used in the valuation include the customer attrition rate assumed and the expected level of future sales.

Pro Forma Results

The following unaudited pro forma results of operations assumes that the API acquisition was made at the beginning of 2014. This unaudited pro forma information does not purport to be indicative of the results that would have been obtained if the acquisitions had actually occurred at the beginning of the year prior to acquisition, nor of the results that may be reported in the future. The 2015 supplemental pro forma earnings reflect adjustments to exclude $1,161 of acquisition-related costs incurred in 2015 and $1,028 of nonrecurring expense related to the fair value adjustment to acquisition-date inventories. As required, the 2014 supplemental pro forma earnings were adjusted to include such charges.



	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Revenue	$	265,213	$	275,049	$	521,359	$	511,625
Net income (loss) attributable to common unitholders	11,304		11,036		89,188		(413		)
Net income (loss) per common unit - basic	0.41		0.38		3.23		(0.01		)
Net income (loss) per common unit - diluted	0.41		0.38		3.20		(0.01		)

The amount of net sales of Cosine and its API subsidiary included in the Company’s Consolidated Statement of Operations for the second quarter and six months ended June 30, 2015 totaled approximately $26,796. The amount of operating income or loss of Cosine and its API subsidiary included in the Company’s Consolidated Statement of Operations for the second quarter and six months ended June 30, 2015 totaled income of approximately $1,500 and a loss of $968, respectively. The results of operations of CoSine and its API subsidiary are included within the Diversified Industrial segment beginning in the second quarter of 2015.

HNH Acquisition of ITW Polymers Sealants North America Inc. (“ITW”)

On March 31, 2015, HNH, through its indirect subsidiary, OMG, Inc. (“OMG”), acquired certain assets and assumed certain liabilities of ITW, which are used in the business of manufacturing two-component polyurethane adhesive for the roofing industry for a cash purchase price of $27,400, reflecting a final working capital adjustment of $400. The assets acquired and liabilities assumed primarily include net working capital of inventories and accrued liabilities; property, plant and equipment; and intangible assets, primarily unpatented technology, valued at $1,700, $100 and $4,400, respectively, on a preliminary basis. ITW was the exclusive supplier of certain adhesive products to OMG, and this acquisition will provide OMG with greater control of its supply chain and allow OMG to expand its product development initiatives. The results of operations of the acquired business are reported within the Company's Diversified Industrial segment. In connection with the ITW acquisition, HNH has recorded goodwill totaling approximately $21,300 on a preliminary basis, which is expected to be deductible for income tax purposes.

2014 Acquisitions

There were no significant acquisitions in 2014.