5. Acquisitions

On July 31, 2018, the Company issued an aggregate of 829,126 shares of common stock of the Company, par value $2.50 per share (the “Shares”), to the former stockholders of Wright Business Forms, Inc., d/b/a Wright Business Graphics (“Wright” or “WBG”), as partial consideration for the acquisition by the Company of all of the outstanding equity interests of WBG by way of a merger of a wholly-owned subsidiary of the Company with and into WBG pursuant to the Agreement and Plan of Merger, dated July 16, 2018 (the “Merger Agreement”). The Shares paid to the former stockholders of WBG represent aggregate consideration under the Merger Agreement equal to approximately $16.2 million. An additional $19.7 million was paid in cash to the stockholders of Wright, subject to a final working capital adjustment, and $2.6 million was paid to pay-off outstanding debt. The issuance of the Shares was exempt from registration pursuant to Section 4(a)(2) under the Securities Act of 1993, as amended, and Regulation D promulgated thereunder. During the six months ended August 31, 2018, the Company incurred approximately $0.2 million of costs (including legal and accounting fees) related to the acquisition. These costs were recorded in selling, general and administrative expenses. Wright is a printing company headquartered in Portland, Oregon with additional locations in Washington and California. The business produces forms, pressure seal, packaging, direct mail, checks, statement processing and commercial printing and sells mainly through distributors and resellers. The goodwill recognized as a part of this merger is not deductible for tax purposes. With this acquisition we will continue to be the preeminent provider of all types of printed products and services to the west coast. The addition of packaging, statement processing and direct mail will add to the overall capabilities of our existing operations, which should help us to continue to penetrate additional markets throughout the United States. Wright, which generated approximately $58.0 million in sales for its fiscal year ended March 31, 2018, will continue to operate under its respective brand names. The purchase price of Wright was as follows (in thousands):

Ennis common stock issued 829,126 shares	$	16,218
Cash		22,299
Purchase price of Wright Business Graphics	$	38,517

The following is a summary of the preliminary purchase price allocation for Wright (in thousands):

Accounts receivable	$	5,190
Prepaid Expenses		427
Inventories		4,365
Other assets		88
Property, plant & equipment		10,379
Noncompete		447
Customer lists		12,900
Trade names		3,830
Goodwill		10,341
Accounts payable and accrued liabilities		(4,166	)
Deferred income taxes		(5,284	)
	$	38,517

The results of operations for Wright are included in the Company’s consolidated financial statements from the date of acquisition. The following table represents certain operating information on a pro forma basis as though all Wright operations had been acquired as of March 1, 2017, after the estimated impact of adjustments such as amortization of intangible assets, interest expense and related tax effects (in thousands, except per share amounts).

	Three months ended		Three months ended		Six months ended		Six months ended
	August 31, 2018		August 31, 2017		August 31, 2018		August 31, 2017
Pro forma net sales	$	107,807	$	108,945	$	215,129	$	218,364
Pro forma net earnings		10,135		9,124		20,144		18,743
Pro forma earnings per share - diluted		0.39		0.36		0.79		0.74

The pro forma results are not necessarily indicative of what would have occurred if the acquisition had been in effect for the period presented.

On April 30, 2018, the Company acquired the assets of a tag and label operation located in New York for $4.7 million in cash plus the assumption of trade payables, subject to a working capital adjustment. In addition, contingent consideration of up to $500,000 is payable to the sellers if certain sales levels are maintained over the next three years. On July 7, 2017, the Company acquired the assets of a tag operation located in Ohio for $1.4 million in cash plus the assumption of certain accrued liabilities. Management considers both of these acquisitions immaterial.