Interline Acquisition

9 Months Ended

Nov. 01, 2015

Business Combinations [Abstract]

Interline Acquisition

INTERLINE ACQUISITION

On August 24, 2015, the Company completed its acquisition of Interline Brands, Inc. ("Interline"). Interline is a leading national distributor and direct marketer of broad-line maintenance, repair and operations ("MRO") products. The Company intends to leverage Interline's capabilities and expertise in MRO products to expand the Company's share of the MRO product market with its current customers as well as gain new customers currently served by Interline.

The aggregate purchase price of this acquisition was $1.7 billion. A portion of the purchase price was used for the repayment of substantially all of Interline's existing indebtedness. The acquisition was accounted for in accordance with FASB ASC 805 "Business Combinations" and, accordingly, Interline's results of operations have been consolidated in the Company's financial statements since the date of acquisition. Acquisition-related costs were expensed as incurred and were not material. Pro forma results of operations for the three and nine months ended November 1, 2015 and November 2, 2014 would not be materially different as a result of the acquisition and therefore are not presented.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for Interline and is subject to the final fair value determination of certain assets and liabilities (amounts in millions):

	Fair Value
Cash	$	6
Receivables	263
Inventories	325
Property and Equipment	56
Intangible Assets	563
Goodwill	782
Other Assets	85
Total assets acquired	2,080
Current Liabilities	197
Other Liabilities	215
Total liabilities assumed	412
Net assets acquired	$	1,668

The intangible assets acquired consist of customer relationships of $310 million, with a weighted average useful life of 12 years, and tradenames of $253 million, with an indefinite life, which are included in Other Assets in the accompanying Consolidated Balance Sheets. The Goodwill of $782 million represents future economic benefits expected to arise from the Company's expanded presence in the MRO market and expected revenue and purchasing synergies. Both the intangible assets and Goodwill acquired are not deductible for income tax purposes.