Note 11 – Acquisitions

On January 31, 2015, the Company acquired the defense, aerospace and training display (DAT) business of Belgium-based Barco N.V. (Barco) for €150 million, or approximately $171 million, in cash before a working capital adjustment of approximately $15 million which decreased the purchase price and was received subsequent to the third fiscal quarter of 2015. The Company incurred a $2.9 million foreign currency exchange loss in the funding of the acquisition in the first fiscal quarter of 2015. Acquisition related costs of $3.4 million have been recognized as selling, general and administrative expense. The Company financed the acquisition primarily using international cash reserves, with the balance funded by borrowings under its existing credit facility. The display business develops and manufactures visualization solutions for a variety of demanding defense and commercial aerospace applications. The display business is included in our 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 fair value adjustment for inventory was $7.1 million, which will be recognized as cost of goods sold over 13 months, the estimated inventory turnover. The fair value of acquired programs represented the value of visualization solutions sold under long-term supply agreements with aerospace companies, military contractors, and OEM manufacturers using similar technology. The valuation of the program included the values of program-specific technology, the backlog of contracts, and the relationship with customers which lead to potential future contracts. The valuation of the programs was based upon the discounted cash flow at a market-based discount rate. The purchase price includes the value of existing technologies, the introduction of new technologies, and the addition of new customers. These factors resulted in recording goodwill of $48.0 million. The amount allocated to goodwill is not deductible for income tax purposes.

In Thousands
As of January 31, 2015

Current assets	$	94,899
Property, plant and equipment		6,211
Intangible assets subject to amortization
Programs (15 year average useful life)		56,513
Programs (3 year average useful life)		677
Trade name (3 year average useful life)		226
Goodwill		48,001
Other assets		3,401
Total assets acquired		209,928

Current liabilities assumed		33,492
Long-term liabilities assumed		5,366
Net assets acquired	$	171,070

On December 20, 2013, the Company acquired Sunbank for $51.7 million. The purchase price included $5 million in additional contingent consideration based upon achievement of certain sales levels over a two-year period, of which the Company paid the first installment of $1.3 million in the third fiscal quarter of 2015. The remaining $3.7 million in additional contingent consideration is expected to be paid. Sunbank is a manufacturer of electrical cable accessories, connectors and flexible conduit systems. Sunbank is included in the Sensors & Systems segment.