ACQUISITIONS

Acquisition of The Valspar Corporation's North American Industrial Wood Business

On June 1, 2017, the Company completed its acquisition from The Valspar Corporation ("Valspar") of certain assets constituting its North American Industrial Wood Coatings business (the "Industrial Wood" business), for a purchase price of $420.0 million, subject to preliminary working capital adjustments of $10.5 million (the "Industrial Wood Acquisition"). The Industrial Wood Acquisition was funded through the refinancing of our Dollar Term Loans discussed further at Note 15.

The Industrial Wood business is one of the leading providers of coatings for original equipment manufacturers ("OEM") and aftermarket industrial wood markets, including building products, cabinets, flooring and furniture, in North America. The Industrial Wood Acquisition was recorded as a business combination under ASC 805, Business Combinations, with identifiable assets acquired and liabilities assumed recorded at their estimated fair values as of the acquisition date.

At September 30, 2017, we have not finalized the purchase accounting related to the Industrial Wood Acquisition and these amounts represent preliminary values. The allocation of the purchase price may be modified up to one year from the date of the acquisition as more information is obtained about the fair value of assets acquired and liabilities assumed. After preliminary working capital adjustments, the Company paid an aggregate purchase price of $430.5 million, which was comprised of the following:



	June 1, 2017 (As Initially Reported)			Measurement Period Adjustments			June 1, 2017 (As Adjusted)
Accounts and notes receivable—trade	$	23.3		$	0.1		$	23.4
Inventories	24.9			(0.2		)	24.7
Prepaid expenses and other	0.2			—			0.2
Property, plant and equipment	23.0			—			23.0
Identifiable intangibles	254.2			3.9			258.1
Accounts payable	(22.4		)	0.2			(22.2		)
Other accrued liabilities	(5.1		)	(0.2		)	(5.3		)
Net assets acquired before goodwill on acquisition	298.1			3.8			301.9
Goodwill on acquisition	132.6			(4.0		)	128.6
Net assets acquired	$	430.7		$	(0.2	)	$	430.5

Goodwill was recognized as the excess of the purchase price over the net identifiable assets recognized. The goodwill is primarily attributed to our assembled workforce and the anticipated future economic benefits and is recorded within our industrial end-market in our Performance Coatings segment. The goodwill recognized at September 30, 2017 that is expected to be deductible for income tax purposes is $128.6 million.

The Company incurred and expensed acquisition-related transaction costs of the Industrial Wood Acquisition of $5.3 million, included within selling, general and administrative expense on the condensed consolidated statements of operations for the nine months ended September 30, 2017.

The fair value associated with definite-lived intangible assets was $258.1 million, comprised of $34.5 million in technology, $8.1 million in trademarks, $202.0 million in customer relationships and $13.5 million in favorable contracts. The definite-lived intangible assets will be amortized over an average term of approximately 19 years.

Supplemental Pro Forma Information

The Company's net sales and income before income taxes for the nine months ended September 30, 2017 include sales of $86.7 million in net sales and a loss of $1.7 million to income before income taxes related to the Industrial Wood business. The following supplemental pro forma information represents the results of operations as if the Company had acquired Industrial Wood on January 1, 2016:



	For the nine months ended
(in millions, except per share data)	September 30, 2017		September 30, 2016
Net sales	$	3,289.4	$	3,205.9
Net income	$	108.8	$	78.4
Net income attributable to controlling interests	$	103.7	$	74.7
Net income per share (Basic)	$	0.43	$	0.31
Net income per share (Diluted)	$	0.42	$	0.31

The 2017 supplemental pro forma net income was adjusted to exclude $5.3 million ($3.3 million, net of pro forma income tax impact) of acquisition-related costs incurred in 2017 and $2.3 million ($1.4 million, net of pro forma income tax impact) of non-recurring expense related to the fair market value adjustment to acquisition date inventory. The unaudited pro forma condensed consolidated information does not necessarily reflect the actual results that would have occurred had the acquisition taken place on January 1, 2016, nor is it meant to be indicative of future results of operations of the combined companies under the ownership and operation of the Company.

Other Acquisitions

During the nine months ended September 30, 2017, we acquired 100% of six businesses ("2017 Acquisitions"), including the acquisition of Industrial Wood. The other five acquisitions included two North American and three European businesses which have operations in both our refinish and industrial end-markets, within our Performance Coatings segment. All of these acquisitions were accounted for as business combinations and the overall impacts to our condensed consolidated financial statements were not considered to be material, either individually or in the aggregate. The fair value associated with definite-lived intangible assets from the 2017 Acquisitions was $315.6 million, comprised of $46.8 million in technology, $18.4 million in trademarks, $234.8 million in customer relationships and $15.6 million in other intangibles primarily consisting of favorable contracts. The total fair value of consideration paid or payable on the 2017 Acquisitions was $565.0 million, including acquisition date fair value of contingent consideration of $5.7 million, respectively.

At September 30, 2017, we have not finalized the purchase accounting related to the 2017 Acquisitions and these amounts represent preliminary values. For our business acquisitions completed after September 30, 2016, including the 2017 Acquisitions, we expect to finalize our purchase accounting during the respective measurement periods, which will be no later than one year following their applicable closing dates.