Ranpak Business Combination—On June 3, 2019, the Company consummated the acquisition of all outstanding and issued equity interests of Rack Holdings pursuant to the Stock Purchase Agreement for consideration of $798.9 million and €140.0 million ($160.8 million) in cash, (A) $341.5 million and €140.0 million of which was used by the Seller to repay outstanding indebtedness and unpaid transaction expenses as contemplated by the Stock Purchase Agreement and (B) the remainder of which was paid to Seller. The purchase price paid at Closing was estimated and will be subject to customary post-Closing adjustments which would include an adjustment for net working capital.

The Ranpak Business Combination is accounted for under ASC 805. Pursuant to ASC 805, the Company has been determined to be the accounting acquirer. Refer to Note 2 for more information. Rack Holdings constitutes a business with inputs, processes, and outputs. Accordingly, the acquisition of Rack Holdings constitutes the acquisition of a business for purposes of ASC 805 and due to the change in control of Rack Holdings was accounted for using the acquisition method. The Company recorded the fair value of assets acquired and liabilities assumed from Rack Holdings.

The allocation of the consideration to the assets acquired and liabilities assumed is based on various estimates. As of June 30, 2019, the Company is evaluating the adjustment for net working capital as part of the purchase price paid at Closing and the fair value of the acquired intangible assets and equipment. As such, to the extent of these estimates, the purchase price allocation is preliminary and subject to change within the respective measurement period which will not extend beyond one year from the acquisition date. Any adjustments will be recognized in the reporting period in which the adjustment amounts are determined.



	Amount
Total Consideration, net of cash acquired	$	944.9

Cash and cash equivalents	10.1
Accounts receivable	28.2
Inventories	15.1
Property, plant and equipment	105.5
Other assets	4.8
Intangible assets	450.9
Total identifiable assets acquired	614.6
Accounts payable	8.6
Accrued expenses	7.4
Other liabilities	3.8
Deferred tax liabilities	112.8
Net identifiable liabilities acquired	132.6
Goodwill	$	462.9

Intangible assets and property, plant and equipment balance comprise the following:



	Preliminary Fair Value		Remaining Useful Lives
Trade Names/Trademarks	$	62.0	15 years
Patented/Unpatented Technology	192.3		10 years
Customer/Distributor Relationships	196.6		15 years
Total Preliminary Fair Value	$	450.9

Machinery and Equipment	$	94.8	5 years
Buildings and Improvements	6.6		15 years
Land	4.1		N/A
Total Preliminary Fair Value	$	105.5

The preliminary fair values for the trade names/trademarks, and patented/unpatented technology were determined using the Relief-from-Royalty Method, which is a combination of an Income Approach and Market Approach. The preliminary fair value for customer/distributor relationships was determined using the Multi-Period Excess Earnings Method, which is an Income-based Approach.

The preliminary fair value for land was determined using Sales Comparison and Cost Approaches, depending on location. The preliminary fair value for machinery and equipment, and buildings and improvements were determined using a Cost Approach, considering physical deterioration when determining current reproduction costs.

The preliminary estimates of remaining useful lives for the intangible assets and property, plant, and equipment were determined by assessing the period of economic benefit of the asset.

Goodwill represents the excess of the total purchase consideration over the fair value of the underlying net assets, largely arising from the assembled workforce, new customers and the replacement of customer and technology attrition. Goodwill is not amortized for tax purposes.

Transaction costs incurred in the Ranpak Business Combination totaled $48.0 million. Of this amount, $12.6 million was classified as debt issuance costs, including $1.7 million presented as assets and $10.9 million presented as a reduction to debt within the condensed consolidated balance sheets. Transaction costs of $0.3 million were expensed in the Successor Period, $7.0 million was expensed in the Predecessor Period from April 1, 2019 through June 2, 2019 and $0.4 million was expensed in the



	Amount
Deferred financing costs	$	12.6
Transaction costs	25.6
Payment of accrued transaction costs	9.8
Total	$	48.0

Debt issuance costs:
Presented as reduction to debt	$	10.9
Presented as asset	1.7
Total Debt issuance costs	$	12.6

The following information represents the unaudited supplemental pro forma results of the Company’s condensed consolidated statement of operations as if the Ranpak Business Combination occurred on January 1, 2018, for the three months and six months ended June 30, 2019 and 2018, after giving effect to certain adjustments, including depreciation and amortization of the assets acquired and liabilities assumed based on their estimated fair values and changes in interest expense resulting from changes in debt (in millions):



	Three Months Ended June 30,					Six Months Ended June 30,
	2019			2018		2019			2018
Net Sales	$	59.9		$	65.2	$	126.5		$	126.8

Net (loss) income	$	(6.1	)	$	1.8	$	(8.6	)	$	(4.9	)

These pro forma results were based on estimates and assumptions, which the Company believes are reasonable. They are not the results that would have been realized had the Company been a combined company during the periods presented and are not necessarily indicative of consolidated results of operations in future periods. The pro forma results include adjustments primarily related to purchase accounting adjustments. Acquisition costs and other non-recurring charges incurred are included in the earliest period presented.

Neopack Acquisition—On February 28, 2017, pursuant to the Share Purchase Agreement (“e3NEO Purchase Agreement”) the Predecessor acquired all of the capital stock of Neopack Solutions S.A.S. dba e3NEO.

The e3NEO Purchase Agreement contained a contingent consideration arrangement that required the Company to pay e3NEO a “Next Generation Machine Payment”, which was computed by the Company based on certain criteria established in the e3NEO Purchase Agreement. The criteria included, but were not limited to, the design and development by e3NEO of a prototype of the “Next Generation Machine” as defined in the e3NEO Purchase Agreement. The maximum amount payable, $1.1 million, was recorded as contingent consideration, of which $0.8 million was paid in the six months ended June 30, 2018, and the remainder of the balance was paid prior to December 31, 2018.

Additionally, the e3NEO Purchase Agreement contains an earn-out provision whereby the seller may be entitled to receive an earn-out payment in an amount up to the greater of (i) $2.6 million (the “Minimum Earn-Out Amount”), and (ii) the trailing twelve (12) month earnings before income taxes, depreciation and amortization of the business calculated as of December 31, 2020 multiplied by forty-eight percent (48%). The earn-out payment, if and to the extent earned, shall be paid in accordance with the terms of the e3NEO Purchase Agreement. In order to be eligible to receive the Minimum Earn-Out Amount pursuant the e3NEO Purchase Agreement, e3NEO must have caused the business to receive purchase orders from customers and receive sign-off from such customers upon completion of a successful factory acceptance test, for at least twenty (20) Next Generation

Machines on or before December 31, 2019 subject to the reasonable approval of the Company. At June 30, 2019 and December 31, 2018, the Company determined the seller would likely be entitled to receive the Minimum Earn-Out Amount of $2.6 million payable in 2020, and as a result, has included the amount payable in other non-current liabilities on the consolidated balance sheet at June 30, 2019 and December 31, 2018.