When we obtain control of a business by acquiring its net assets, or some or all of its equity interest, we account for those acquisitions in accordance with ASC 805, “Business Combinations”. The estimated fair values of all assets acquired and liabilities assumed in acquisitions are provisional and may be revised as a result of additional information obtained during the measurement period of up to one year from the acquisition date.

On December 1, 2022, we completed our previously announced acquisition of the remaining 67.7% interest in Grupo Gondi. Grupo Gondi is a leading integrated producer of fiber-based sustainable packaging solutions that

operates four paper mills, nine corrugated packaging plants and six high graphic plants throughout Mexico, producing sustainable packaging for a wide range of end markets in the region. This tuck-in acquisition is expected to provide us with further geographic and end market diversification as well as position us to continue to grow in the attractive Latin American market.

In connection with the transaction, in the first quarter of fiscal 2023 we recognized a $46.8 million non-cash, pre-tax loss (or $24.6 million after release of a related deferred tax liability) on our original 32.3% investment. The loss is reflected in the Equity in income (loss) of unconsolidated entities line item in our consolidated statements of operations and included the write-off of historical foreign currency translation adjustments previously recorded in Accumulated other comprehensive loss in our consolidated balance sheet, as well as the difference between the fair value of the consideration paid and the carrying value of our prior ownership interest. The fair value of our previously held interest in Grupo Gondi was estimated to be $403.7 million at the acquisition date based on the cash consideration exchanged for acquiring the 67.7% of equity interest adjusted for the deemed payment of a control premium. This step-acquisition provided us with 100% control of Grupo Gondi and we met the other requirements under ASC 805 to be accounted for using the acquisition method of accounting. We have included the financial results of the acquired operations in our Corrugated Packaging segment. Post acquisition, sales to Grupo Gondi are eliminated from Global Paper results.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed in the Grupo Gondi Acquisition by major class of assets and liabilities as of the acquisition date, as well as adjustments made during fiscal 2023 (referred to as “measurement period adjustments”) (in millions):


	Amounts Recognized as of the Acquisition Date		Measurement Period Adjustments (1)			Amounts Recognized as of Acquisition Date (as Adjusted) (2)
Cash and cash equivalents	$	116.3	$	—		$	116.3
Current assets, excluding cash and cash equivalents		697.0		(1.6	)		695.4
Property, plant and equipment		1,380.3		15.2			1,395.5
Goodwill		231.2		2.1			233.3
Other noncurrent assets		101.4		(0.1	)		101.3
Total assets acquired		2,526.2		15.6			2,541.8

Current portion of debt (3)		13.2		0.5			13.7
Current liabilities, excluding debt		384.8		0.4			385.2
Long-term debt due after one year (3)		591.4		14.7			606.1
Pension liabilities, net of current portion		35.2		—			35.2
Deferred income taxes		69.8		—			69.8
Other noncurrent liabilities		18.1		—			18.1
Total liabilities assumed		1,112.5		15.6			1,128.1
Net assets acquired	$	1,413.7	$	—		$	1,413.7

(1)

The measurement period adjustments recorded in fiscal 2023 did not have a significant impact on our consolidated statements of operations for the three and six months ended March 31, 2023.

(2)

The measurement period adjustments were primarily due to refinements to the carrying amounts of certain assets and liabilities. The net impact of the measurement period adjustments resulted in a net increase in goodwill.

We continue to analyze the estimated values of all assets acquired and liabilities assumed including, among other things, finalizing third-party valuations; therefore, the allocation of the purchase price remains preliminary and subject to revision.

Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The fair value assigned to goodwill is primarily attributable to buyer-specific synergies expected to arise after the acquisition (e.g., enhanced reach of the combined organization and other synergies), the assembled work force, as well as due to establishing deferred tax liabilities for the difference between book and tax basis of the assets and liabilities acquired. The goodwill is not amortizable for income tax purposes.

Transaction costs to acquire Grupo Gondi are expensed as incurred and recorded within Restructuring and other costs. See “Note 5. Restructuring and Other Costs” for additional information.