Note 4—Acquisitions

The Company accounts for acquisitions using the acquisition method of accounting. The results of operations of the acquisitions are included in the consolidated results from their respective dates of acquisition. The purchase price of each acquisition is allocated to the tangible assets, liabilities, and identifiable intangible assets acquired based on their estimated fair values.

Fiscal 2017

On November 4, 2016, the Company acquired the assets and business of i3 Plastic Cards (“i3”), a fully-integrated solution provider for creating and personalizing plastic transaction cards, including pre-paid gift and loyalty cards that is based in Dallas, Texas. The i3 business complements the Company’s existing transaction card operations and offers customers a broader range of options. The purchase price included cash consideration of $12,852 and 226,244 common shares of the Company, valued at $3,000. The cash portion of the purchase price was funded with existing cash balances. Additional cash consideration may be paid based on the acquired business’ EBITDA, as defined in the Asset Purchase Agreement, through December 31, 2019. Such additional cash consideration may range from zero to $13,800. The i3 operations, which are included in the North America operating segment, are not material to the Company’s consolidated financial statements.

On October 14, 2016, the Company acquired AJS Group Limited (“AJS”), a leading supplier in the United Kingdom of self-adhesive labels. The addition of this specialist business complements the Company’s existing operations and extends the group’s marketing capability and reach to customers within the branded consumer sectors and international beauty and personal care sectors. The cash purchase price, net of cash acquired, totaled £11,414 ($13,913 at the transaction date exchange rate), and was funded with existing cash balances. The AJS operations, which are included in the Europe operating segment, are not material to the Company’s consolidated financial statements.

The following table summarizes the components of the preliminary purchase price allocations for the acquisitions completed in fiscal 2017. The purchase price allocations are based upon preliminary valuations, and the Company’s estimates and assumptions are subject to change within the measurement period as valuations are finalized. Any change in the estimated fair value of the net assets, prior to the finalization of the more detailed analyses, but not to exceed one year from the dates of acquisition, will change the amount of the purchase price allocation.


	i3		AJS		Total
Purchase Price:
Cash paid, net of cash acquired	$	12,852	$	13,913	$	26,765
Equity issued		3,000		—		3,000
Fair value of contingent consideration		5,000		—		5,000
Total investment:	$	20,852	$	13,913	$	34,765

Allocation:
Current assets	$	1,835	$	3,779	$	5,614
Property, plant and equipment		3,090		2,388		5,478
Identifiable intangible assets		6,000		4,790		10,790
Deferred taxes		—		(1,020)		(1,020)
Assumed liabilities		(4,030)		(1,910)		(5,940)
Goodwill		13,957		5,886		19,843
	$	20,852	$	13,913	$	34,765

The preliminary fair values assigned to identifiable intangible assets acquired were based on assumptions and estimates made by management. Identifiable intangible assets acquired consisted of customer relationships valued at $4,790 with an estimated useful life of 13 years and developed technology valued at $6,000 with an estimate useful life of 10 years. The goodwill is the residual of the purchase price in excess of the estimated fair value of the acquired identifiable net assets and represents the future economic benefits expected to arise that could not be individually identified and separately recognized, including the extension of the Company’s sales and marketing capabilities. The goodwill recorded as a result of the AJS acquisition is not expected to be deductible for tax purposes.

Fiscal 2016

On January 26, 2016, the Company completed the acquisition of Chicago Paper Tube & Can Co. (“CPT”). The acquisition of CPT provides the Company with high-end, round rigid packaging capability in North America. Consideration for the transaction consisted of cash totaling $8,189, net of cash acquired, and was funded from existing cash balances. CPT’s operations, which are included in the North America operating segment, are not material to the Company’s consolidated financial statements.

On July 1, 2015, the Company completed the acquisition of BP Media, Ltd. (“BluePrint”). The acquisition of BluePrint provides the Company with pre-press and digital services in the European market, facilitating the processes surrounding translation and interchangeability of print content for foreign locations. In addition, BluePrint provides the Company with an established sales presence in the media markets in Europe, which will enable the Company to serve the European needs of global media releases. Consideration in the transaction consisted of cash totaling £1,587 (approximately $2,496 at the transaction date exchange rate), net of cash acquired. The purchase price was funded from existing cash balances. Subject to the provisions in the agreement, additional consideration of £1,000 (approximately $1,224 at current period-end exchange rates) is payable on June 30, 2018. Further consideration of 25% of the acquired business’s EBITDA, as defined in the share purchase agreement, for the three fiscal years ending June 30, 2018 is also payable to the sellers, subject to the achievement of a minimum EBITDA. The Company estimated £944 (approximately $1,176 at current period-end exchange rates) as the fair value of such contingent consideration as of the acquisition date. There were no material changes to the fair value of the contingent consideration between the acquisition date and March 31, 2017. BluePrint’s operations, which are included in the Europe operating segment, are not material to the Company’s consolidated financial statements.