Acquisitions and Divestitures

6 Months Ended

Jun. 01, 2013

Acquisitions and Divestitures Abstract

Acquisitions and Divestitures Disclosure

Note 2: Acquisitions and Divestitures

Acquisitions

Engent, Inc.: On September 10, 2012 we acquired the outstanding shares of Engent, Inc., a provider of manufacturing, research and development services to the electronics industry. The purchase price of $7,881 was funded through existing cash and was recorded in our North America Adhesives operating segment.

In addition to the initial consideration, the former owners of the Engent, Inc. business are entitled to receive a series of annual cash payments based on certain financial performance criteria during the period September 10, 2012 through November 28, 2015 up to a maximum additional consideration of $2,000. We used a probability-weighted present value technique based on expected future cash flows to estimate the fair value of the contingent consideration. The resulting fair value of the contingent consideration was $1,200 which was recorded in other liabilities and increased goodwill. Each reporting period we determine the fair value of the contingent consideration liability and any changes in value are reflected in the Condensed Consolidated Statements of Income.

The following table summarizes the final fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

	Preliminary Valuation December 1, 2012		Fair Value Adjustments		Final Valuation
Current assets	$	603	$	-	$	603
Property, plant and equipment		1,471		-		1,471
Goodwill		5,434		247		5,681
Other intangibles
Customer relationships		2,300		-		2,300
Noncompetition agreements		400		-		400
Trademarks/trade names		300		-		300
Other assets		325		(305)		20
Current liabilities		(84)		(6)		(90)
Other liabilities		(1,668)		64		(1,604)
Contingent consideration liabilities		(1,200)		-		(1,200)
Total purchase price	$	7,881	$	-	$	7,881
The adjustments to the purchase price allocation primarily relate to non-current deferred tax assets and liabilities.

Forbo Industrial Adhesives. On March 5, 2012 we completed the acquisition of the global industrial adhesives and synthetic polymers business of Forbo Holding AG. The purchase price was 368,514 Swiss francs or $403,100 which we financed with the proceeds from our March 5, 2012 note purchase agreement and a term loan.

As of March 5, 2013, we completed our final purchase price allocation including final tax adjustments. The following table summarizes the fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

	Preliminary Valuation December 1, 2012		Purchase Price and Fair Value Adjustments		Final Valuation
Current assets	$	172,345	$	-	$	172,345
Property, plant and equipment		92,443		-		92,443
Goodwill		136,658		343		137,001
Other intangibles
Developed technology		42,190		-		42,190
Customer relationships		58,910		-		58,910
Trademarks/trade names		21,880		-		21,880
Other		479		-		479
Other assets		4,605		-		4,605
Current liabilities		(84,251)		(184)		(84,435)
Other liabilities		(40,534)		(1,784)		(42,318)
Total purchase price	$	404,725	$	(1,625)	$	403,100
The adjustments to the purchase price allocation primarily relate to non-current deferred tax liabilities and purchase price adjustments.

Divestitures

Central America Paints.On August 6, 2012 we completed the sale of our Central America Paints business to Compania Global de Pinturas S.A., a company of Inversiones Mundial S.A for cash proceeds of $118,566. In accordance with ASC 205-20 “Discontinued Operations”, we have classified the results of this business as discontinued operations. The operational results of this business are presented in the “Income from discontinued operations, net of tax” line item on the Condensed Consolidated Statements of Income. Also in accordance with ASC 205-20, we have not allocated general corporate charges to this business. The assets and liabilities of this business are presented on the Condensed Consolidated Balance Sheets as assets and liabilities of discontinued operations.

Revenue and income (loss) from discontinued operations for the period ended June 2, 2012were as follows:

	13 Weeks Ended		26 Weeks Ended
	June 2, 2012		June 2, 2012
Net revenue	$	26,321	$	56,129
Income from operations		3,819		6,662
Income taxes		(6,872)		(7,992)
Net income (loss) from discontinued operations	$	(3,053)	$	(1,330)

The major classes of assets and liabilities of discontinued operations as of June 1, 2013 and December 1, 2012 were as follows:

	June 1, 2013		December 1, 2012
Other current assets		1,865		-
Current assets of discontinued operations		1,865		-
Other assets		-		1,865
Long-term assets of discontinued operations		-		1,865
Trade payables		-		74
Other accrued expenses		5,000		-
Current liabilities of discontinued operations		5,000		74
Other liabilities		-		5,000
Long-term liabilities of discontinued operations		-		5,000