Acquisitions

In October 2012, the Company acquired 100% of the stock of Jamco Products Inc. ("Jamco"), an Illinois corporation that is a leading designer and manufacturer of heavy-duty industrial steel carts and safety cabinets used across many markets. The total purchase price was approximately $15.1 million in cash, net of $0.1 million of cash acquired.

Jamco's assets and liabilities are recorded at fair value as of the date of acquisition using primarily level 2 and level 3 fair value inputs. Intangible assets included in the acquisition of Jamco are trade name of $1.2 million, technology of $2.0 million, non-compete agreement of $0.1 million and customer relationships of $2.4 million. The technology, non-compete agreement and customer relationships are subject to amortization and have estimated useful lives of ten, two and six years, respectively. The Jamco trade name has an indefinite life and will be subject to evaluation for impairment. The Company is awaiting final valuation studies to complete the purchase price allocation.

In July 2012, the Company acquired 100% of the stock of Plasticos Novel do Nordeste S.A. ("Novel"), a Brazil-based designer and manufacturer of reusable plastic crates and containers used for closed-loop shipping and storage. Novel also produces a diverse range of plastic industrial safety products. The total purchase price was approximately $31.0 million, which includes a cash payment of $3.4 million, net of $0.6 million of cash acquired, assumed debt of approximately $26.0 million and contingent consideration of $0.9 million based on an earnout. A majority of the debt was repaid shortly after acquisition. The contingent consideration is contingent upon the results of Novel exceeding predefined earnings before interest, taxes, depreciation and amortization over the next four years.

Novel's assets and liabilities are recorded at fair value as of the date of acquisition using primarily level 3 fair value inputs. Intangible assets included in the acquisition of Novel include trade name of $1.6 million, know-how of $1.8 million and customer relationships of $2.4 million. The know-how and customer relationships are subject to amortization and have estimated useful lives of ten and six years, respectively. The Novel trade name has an indefinite life and will be subject to evaluation for impairment.

The operating results of both businesses acquired have been included in our Material Handling Segment since the date of acquisition.

The allocation of the purchase price and the estimated goodwill, which is not deductible for income tax purposes, and other intangibles are as follows:




(dollars in thousands)	Novel		Jamco (Preliminary)
Assets acquired:
Cash	$	630	$	88

Accounts receivable	5,467		1,690
Inventory	5,993		3,282
Property, plant & equipment	13,636		2,559
Intangibles	5,790		5,680
Deferred tax assets	435		28
Prepaid assets	1,451		48
Other	719		2
Assets acquired	33,491		13,289

Liabilities assumed:
Accounts payable and accruals	$	3,134	$	1,436
Other taxes	3,608		676
Other long-term obligations	2,293		454
Debt	26,028		—
Deferred income taxes	3,804		3,044
Liabilities assumed	38,867		5,610
Goodwill	8,805		7,435
Total consideration, less cash acquired	$	3,429	$	15,114

The Consolidated Statement of Income (Loss) for the Company for the year ended December 31, 2012 following the acquisition of Novel effective July 1, 2012 and Jamco on October 1, 2012 included total revenues of $21.5 million and net income of $0.2 million. Transactional costs of approximately $0.9 million were incurred during the year and are included in general and administrative expenses in the Consolidated Statements of Income (Loss) in 2012.

The following unaudited pro forma information presents a summary of consolidated results of operations for the Company including Novel and Jamco as if the acquisitions had occurred on January 1, 2011.



(Amounts in thousands, except per share data)	2012		2011
Net sales	$	820,649	$	807,244
Cost of sales	596,178		593,870
Gross profit	224,471		213,374
Selling, general & administrative expenses	168,794		169,433
Operating income	55,677		43,941
Interest expense, net	7,333		7,931
Income before taxes	48,344		36,010
Income taxes	17,784		9,508
Net income	$	30,560	$	26,502

Income per basic share	$	0.91	$	0.77
Income per diluted share	$	0.90	$	0.76

These unaudited pro forma results have been prepared for comparative purposes only and may not be indicative of results of operations which actually would have occurred had the acquisitions taken place on January 1, 2011 or indicative of future results.

In July 2011, the Company acquired tooling assets and intellectual property for a new reusable plastic container used in producing, shipping and processing bulk natural cheese from Material Improvements L.P. The total purchase price was $5.7 million, comprised of a $1.1 million cash payment and $4.6 million contingent consideration none of which has been paid as of December 31, 2012. The contingent consideration was reduced by approximately $1.0 million due to a change in projections used to estimate the value of the liability at December 31, 2012. The allocation of purchase price included $0.3 million of property, plant and equipment, amortizable intangible assets, which included $1.3 million in technology and $0.2 million for trade name, and $3.9 million in goodwill. These assets and liabilities incurred were recorded at estimated fair value as of the date of the acquisition using primarily level 3 inputs. The consolidated operating results of the business acquired have been included in our Material Handling Segment since the date of acquisition.

In July 2010, the Company acquired the assets of Enviro-Fill, Inc., a developer of a new fuel overfill prevention and fuel vapor capture system. The total purchase price was approximately $1.5 million, including contingent liabilities for additional future consideration. The allocation of purchase price includes $0.8 million of amortizable intangible assets and $0.7 million of goodwill. These assets were recorded at fair value as of the date of acquisition using primarily level 2 and 3 inputs. The Enviro-Fill business is included in the Company's Engineered Products Segment.