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Note 2 - Acquisitions and Divestiture
3 Months Ended
Feb. 29, 2020
Notes to Financial Statements  
Business Combination Disclosure [Text Block]

Note 2: Acquisitions and Divestiture

 

D.H.M. Adhesives, Inc.

 

On February 3, 2020, we acquired certain assets of D.H.M. Adhesives, Inc. (“D.H.M.”) for approximately $9,500 which was funded through existing cash. In addition, the agreement requires us to pay contingent consideration of up to approximately $8,100 based upon a formula related to revenue during the fiscal years ended November 27, 2021 and December 3, 2022. D.H.M., headquartered in Calhoun, Georgia, is a provider of hotmelt adhesives. The acquisition fair value measurement was preliminary as of February 29, 2020, which includes goodwill of $1,071 and customer relationship intangible of $11,900. The fair value of the contingent consideration as of the date of acquisition was $5,000. See Note 13 for further discussion of the fair value of the contingent consideration. Goodwill is deductible for tax purposes. D.H.M. and the related goodwill are reported in our Hygiene, Health and Consumable Adhesives (“HHC”) operating segment. The D.H.M acquisition does not represent a material business combination, and therefore pro forma financial information is not provided.

 

Ramapo Sales and Marketing, Inc.

 

On May 17, 2019, we acquired certain assets from a window and insulating glass sealants sales and distribution company, Ramapo Sales and Marketing, Inc. (“Ramapo”), headquartered in Charleston, South Carolina. This acquisition supports the integration of the insulating glass business that we acquired as part of the Royal Adhesives acquisition. The purchase price of $8,292 was funded through existing cash. In addition, we are required to pay up to $3,400 in contingent consideration based upon financial results for the twelve months ended December 31, 2019. Existing receivables of $2,166 from Ramapo were effectively settled as a result of the acquisition. The acquisition fair value measurement was preliminary as of February 29, 2020, which includes goodwill of $165, customer relationship intangible of $8,800, and additional acquired assets of $4,148. The fair value of the contingent consideration is $2,700. Goodwill is deductible for tax purposes. Ramapo and the related goodwill are reported in our Engineering Adhesives (“EA”) operating segment.