Acquisitions

12 Months Ended

Dec. 31, 2019


3.			Acquisition

On April 1, 2019, the Company acquired all of the outstanding shares of Schaffner Manufacturing Company, Inc. (“Schaffner”). Schaffner is a North American manufacturer of high-quality polishing and finishing products. These products are now being manufactured and distributed by the industrial segment. Through the acquisition of Schaffner, the Company expanded its polishing product line offerings within North America. Upon finalization of working capital adjustments and other settlement items, the purchase price was $11.0 million, net of $0.2 million of cash acquired, all of which had been paid as of December 31, 2019. The related purchase agreement includes customary representations, warranties and covenants between the named parties.

The acquisition was accounted for as a business combination. The operating results and cash flows of Schaffner are included in the Company’s consolidated financial statements from April 1, 2019, the date of the acquisition.

The Company has recorded the allocation of the purchase price for tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values as of the April 1, 2019 acquisition date. The purchase price allocation is as follows:


	Purchase Price Allocation

Accounts receivable	$	2,415
Inventories	3,334
Other current assets	18
Property, plant and equipment	2,299
Right-of-use operating lease assets	222
Goodwill	2,078
Other intangible assets	2,670

Current liabilities	(1,911)

Other long-term liabilities	(125)
Total purchase price	$	11,000

The purchase price allocation resulted in goodwill of $2.1 million in the industrial segment, all of which is deductible for tax purposes. Goodwill generated from Schaffner is primarily attributable to expected synergies from leveraging the industrial segment’s global distribution and sales network and cross-selling of Schaffner’s product portfolio to the industrial segment’s customer base. The allocation of the purchase price is based on the valuations performed to determine the fair value of the net assets as of the acquisition date. The amounts allocated to goodwill and intangible assets reflect the final valuations.

The values allocated to other intangible assets - net and the weighted average useful lives are as follows:


	Gross Carrying Amount		Weighted Average Useful Life (years)
Customer relationships	$	1,750	10
Trademarks	400		1
Non-compete agreements	520		5
	$	2,670

The Company recognized $0.4 million of acquisition-related costs that were expensed in the year ended December 31, 2019. These costs are included as selling and administrative expenses in the consolidated statements of operations.

During the year ended December 31, 2019, $14.4 million of net sales from Schaffner were included in the Company’s consolidated statements of operations. Pro forma historical results of operations related to the acquisition of Schaffner have not been presented as they are not material to the Company’s consolidated statements of operations.