NOTE 14: Acquisitions

On February 4, 2013, the Company acquired the Gamesman Group (Gamesman) for $40.8 million. Gamesman is a global supplier of input devices principally serving the gaming industry. Gamesman is included in the Avionics & Controls segment.

On July 26, 2011, the Company acquired the Souriau Group (Souriau) for $726.7 million, including cash on hand of $17.8 million. Souriau is a leading global supplier of highly engineered connectors for harsh environments serving aerospace, defense & space, power generation, rail, and industrial equipment markets. Souriau is included in the Sensors & Systems segment.

The following summarizes the allocation of the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition. The fair value adjustment for inventory was $41.7 million, which has been recognized as cost of goods sold over 4.5 months, the estimated inventory turnover. Acquisition-related costs of $9.2 million have been recognized as selling, general and administrative expense in fiscal 2011. The purchase price includes the value of future development of existing technologies, the introduction of new technologies, and the addition of new customers. These factors resulted in recording goodwill of $380.5 million. The amount allocated to goodwill is not deductible for income tax purposes.


In Thousands
As of July 26, 2011

Current assets	$	228,199
Property, plant and equipment		91,843
Intangible assets subject to amortization
Programs (15 year weighted average useful life)		224,296
Trade name (10 year weighted average useful life)		45,709
Goodwill		380,458
Other assets		6,900

Total assets acquired		977,405

Current liabilities assumed		110,596
Long-term liabilities assumed		131,735
Noncontrolling interest		8,369

Net assets acquired	$	726,705

Pro Forma Financial Information

The following pro forma financial information shows the results of continuing operations for the year ended October 28, 2011, as though the acquisition of Souriau had occurred at the beginning of the fiscal year. The pro forma financial information includes, where applicable, adjustments for: (i) the amortization of acquired intangible assets, (ii) additional interest expense on acquisition-related borrowings and (iii) the income tax effect on the pro forma adjustments. The pro forma financial information below is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved had the acquisition been completed as of the date indicated above or the results that may be obtained in the future.


In Thousands, Except Per Share Amounts	2011

Pro forma net sales	$	1,972,079
Pro forma net income	$	159,353

Basic earnings per share as reported	$	4.36
Pro forma basic earnings per share	$	5.22

Diluted earnings per share as reported	$	4.27
Pro forma diluted earnings per share	$	5.12

On December 30, 2010, the Company acquired Eclipse Electronic Systems, Inc. (Eclipse) for $123.8 million. The purchase price included cash of $14.0 million in contingent consideration, which was deposited in an escrow account, payable to the seller if certain performance objectives were met over the three-year period. The estimated fair value of the consideration at acquisition was $13.4 million. At October 25, 2013, the liability is $4.0 million and $10.0 million has been paid to the seller. Eclipse is a designer and manufacturer of embedded communication intercept receivers for signal intelligence applications. Eclipse is included in the Avionics & Controls segment.

The following summarizes the allocation of the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition. The purchase price includes the value of future development of existing technologies, the introduction of new technologies, and the addition of new customers. These factors resulted in recording goodwill of $67.4 million. The amount allocated to goodwill is not deductible for income tax purposes.


In Thousands
As of December 30, 2010

Current assets	$	31,827
Property, plant and equipment		2,154
Intangible assets subject to amortization
Technology (9 year weighted average useful life)		53,200
Goodwill		67,378

Total assets acquired		154,559

Current liabilities assumed		35,740
Long-term liabilities assumed		8,350

Net assets acquired	$	110,469

The above acquisitions were accounted for under the purchase method of accounting and the results of operations were included from the effective date of each acquisition.