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Acquistion
9 Months Ended
Apr. 28, 2013
Business Combinations [Abstract]  
Acquisition
Acquisition
On August 6, 2012, the company completed the acquisition of BF Bolthouse Holdco LLC (Bolthouse Farms) from a fund managed by Madison Dearborn Partners, LLC, a private equity firm, for $1,550 in cash, subject to customary purchase price adjustments. On August 6, 2012, the preliminary purchase price adjustments resulted in an increase in the purchase price of $20. In the third quarter, the purchase price adjustments were finalized and reduced to $11. The company funded the acquisition through a combination of short- and long-term borrowings.
The acquisition of Bolthouse Farms provides the company with a new growth platform. Bolthouse Farms is a vertically integrated food and beverage company focused on developing, manufacturing and marketing fresh carrots and proprietary, high value-added natural, healthy products. Bolthouse Farms is one of the market leaders in super-premium refrigerated beverages in the U.S. and Canada and expands the company's beverage portfolio. Bolthouse Farms' leading U.S. and Canadian market position in fresh carrots anchors its business and provides significant cash flow. In addition, Bolthouse Farms' prominent position in the high-growth packaged fresh category offers opportunities for expansion into adjacent segments that respond directly to significant consumer trends.
The company incurred transactions costs of $10 ($7 after tax) in the first quarter of 2013 and $5 ($3 after tax) during the fourth quarter of 2012. The costs were recorded in Other expenses/(income).
The acquisition of Bolthouse Farms contributed $205 to Net sales and resulted in an increase of $6 to Net earnings for the three months ended April 28, 2013, and contributed $571 to Net sales and resulted in an increase of $8 to Net earnings from August 6, 2012 through April 28, 2013. Net earnings reflect the transaction costs incurred in 2013, additional interest expense on the debt issued to finance the purchase, amortization and depreciation expense based on the estimated fair value and useful lives of intangible assets, plant assets, and related tax effects.
The following unaudited summary information is presented on a consolidated pro forma basis as if the acquisition had occurred on August 1, 2011.
 
Three Months Ended
 
Nine Months Ended
 
April 28, 2013
 
April 29, 2012
 
April 28, 2013
 
April 29, 2012
Net sales
$
2,094

 
$
2,013

 
$
6,776

 
$
6,618

Net earnings attributable to Campbell Soup Company
$
181

 
$
167

 
$
616

 
$
628

Earnings per share attributable to Campbell Soup Company
$
0.57

 
$
0.53

 
$
1.94

 
$
1.95


The pro forma amounts include transaction costs, additional interest expense on the debt issued to finance the purchase, amortization and depreciation expense based on the estimated fair value and useful lives of intangible assets, plant assets, and related tax effects. The pro forma results are not necessarily indicative of the combined results had the acquisition been completed at August 1, 2011, nor are they indicative of future combined results.
The acquired assets and assumed liabilities include the following:
 
 
August 6, 2012
Cash
 
$
3

Accounts receivable
 
74

Inventories
 
122

Other current assets
 
8

Plant assets
 
335

Goodwill
 
691

Other intangible assets
 
580

Other assets
 
8

Short-term debt
 
(1
)
Accounts payable
 
(59
)
Accrued liabilities
 
(34
)
Long-term debt
 
(1
)
Deferred income taxes
 
(150
)
Other liabilities
 
(15
)
Total of assets acquired and liabilities assumed
 
$
1,561


The purchase price allocation is preliminary and is subject to the finalization of tax balances, which will be completed in the fourth quarter of 2013.
The excess of the purchase price over the estimated fair values of the identifiable assets was recorded as $691 of goodwill. Of this amount, $284 is expected to be deductible for tax purposes. The goodwill was primarily attributable to future growth opportunities and any intangible assets that did not qualify for separate recognition. The goodwill is included in the Bolthouse and Foodservice segment.
The fair value of intangible assets is as follows:
 
 
Type
 
Life
 
Value
Trademarks
 
Non-amortizable
 
Indefinite
 
$
383

Customer relationships
 
Amortizable
 
20 years
 
132

Distributor relationship
 
Amortizable
 
7 years
 
2

Technology and patents
 
Amortizable
 
9
to
17 years
 
43

Formula and recipes
 
Amortizable
 
5 years
 
20

     Total identifiable assets
 
 
 
 
 
 
 
$
580