PCLI Acquisition

On October 29, 2016, our wholly-owned subsidiary, 9952110 Canada Inc., entered into a share purchase agreement with Suncor to acquire 100% of the outstanding capital stock of PCLI. The acquisition closed on February 1, 2017. Cash consideration paid was $862.1 million, or $1.125 billion in Canadian dollars. PCLI is located in Mississauga, Ontario, Canada and is a producer of lubricant products such as base oils, white oils, specialty products and finished lubricants. The operations of our Petro-Canada Lubricants business also include marketing of these products to both retail and wholesale outlets through a global sales network with locations in Canada, the United States, Europe and China.

Aggregate consideration totaled $906.7 million and consists of $862.1 million in cash paid to Suncor at acquisition, a closing date working capital settlement of $30.6 million that was paid to Suncor in the second quarter of 2017, an accrued payable in the amount of $7.4 million, and $6.6 million representing a portion of the fair value of replacement restricted stock unit awards issued to PCLI employees that relate to pre-acquisition services.

This transaction is accounted for as a business combination using the acquisition method of accounting, with the purchase price allocated to the fair value of the acquired PCLI assets and liabilities as of the February 1 acquisition date, with the excess purchase price recorded as goodwill assigned to our Lubricants and Specialty Products segment. This goodwill is not deductible for income tax purposes.

The following summarizes the PCLI value of assets and liabilities acquired on February 1, 2017:



	(in millions)
Cash and cash equivalents	$	21.6
Accounts receivable and other current assets	118.5
Inventories	214.9
Properties, plants and equipment	438.0
Goodwill	194.8
Intangibles, precious metals and other noncurrent assets	124.3
Accounts payable and accrued liabilities	(87.4		)
Deferred income tax liabilities	(105.4		)
Other long-term liabilities	(12.6		)
Net assets acquired	$	906.7

Our consolidated financial and operating results reflect the operations of our Petro-Canada Lubricants business beginning February 1, 2017. Our results of operations for the year ended December 31, 2017 included revenues and income before income taxes of $1,125.3 million and $71.8 million, respectively, related to these operations.

As of December 31, 2017, we have incurred $27.9 million in incremental direct acquisition and integration costs that principally relate to legal, advisory and other professional fees and are presented as selling, general and administrative expenses.