2.	ACQUISITIONS

2013 Acquisitions:

On March 29, 2013, the Company completed its acquisition of TRP for $21.0 million, net of cash acquired. The Company’s purchase of TRP consisted of the integrated connector module (“ICM”) family of products, including RJ45, 10/100 Gigabit, 10G, PoE/PoE+, MRJ21 and RJ.5, a line of modules for smart-grid applications, and discrete magnetics.

On August 20, 2013, the Company completed its acquisition of Array, a manufacturer of aerospace and mil-spec connector products based in Miami, Florida, for $10.0 million in cash. The acquisition of Array expands the Company’s portfolio of connector products that can be offered to the combined customer base, and provides an opportunity to sell other products that Bel manufactures to Array’s customers. Array has become part of Bel’s Cinch Connector business.

During the years ended December 31, 2013 and 2012, the Company incurred $0.7 million and $0.5 million, respectively, of acquisition-related costs associated with the 2013 Acquisitions. These costs are included in selling, general and administrative expense in the accompanying consolidated statements of operations for the year ended December 31, 2013 and 2012.

While the initial accounting related to the acquisitions of TRP and Array is not complete as of the filing date of this Annual Report on Form 10-K, the following table depicts the Company’s current estimate of the respective acquisition date fair values of the consideration paid and identifiable net assets acquired (in thousands):

	TRP									Array									2013 Acquisitions
				Measurement			March 29,						Measurement			August 20,			Acquisition-Date
	March 29,			Period			2013			August 20,			Period			2013			Fair Values
	2013			Adjustments			(As adjusted)			2013			Adjustments			(As adjusted)			(As adjusted)
Cash	$	8,388		$	(29	)	$	8,359		$	-		$	-		$	-		$	8,359
Accounts receivable		11,580			(39	)		11,541			994			-			994			12,535
Inventories		6,258			1,097			7,355			2,588			(1,595	)		993			8,348
Other current assets		1,953			(181	)		1,772			83			345			428			2,200
Property, plant and equipment		4,693			1,097			5,790			2,285			1,225			3,510			9,300
Intangible assets		-			6,110			6,110			-			1,470			1,470			7,580
Other assets		1,151			84			1,235			84			1,663			1,747			2,982
Total identifiable assets		34,023			8,139			42,162			6,034			3,108			9,142			51,304

Accounts payable		(8,565	)		331			(8,234	)		(677	)		1			(676	)		(8,910	)
Accrued expenses		(4,003	)		(219	)		(4,222	)		(206	)		(79	)		(285	)		(4,507	)
Other current liabilities		(25	)		(791	)		(816	)		(214	)		214			-			(816	)
Noncurrent liabilities		-			(586	)		(586	)		(643	)		(1,105	)		(1,748	)		(2,334	)
Total liabilities assumed		(12,593	)		(1,265	)		(13,858	)		(1,740	)		(969	)		(2,709	)		(16,567	)
Net identifiable assets acquired		21,430			6,874			28,304			4,294			2,139			6,433			34,737
Goodwill		8,278			(7,234	)		1,044			5,666			(2,094	)		3,572			4,616
Net assets acquired	$	29,708		$	(360	)	$	29,348		$	9,960		$	45		$	10,005		$	39,353


Cash paid	$	22,400		$	6,948		$	29,348		$	9,960		$	45		$	10,005		$	39,353
Assumption of severance payment		109			(109	)		-			-			-			-			-
Fair value of consideration
transferred		22,509			6,839			29,348			9,960			45			10,005			39,353
Deferred consideration		7,199			(7,199	)		-			-			-			-			-
Total consideration paid	$	29,708		$	(360	)	$	29,348		$	9,960		$	45		$	10,005		$	39,353

The measurement period adjustments noted above primarily relate to adjustments to fair value based on the preliminary appraisals on inventory, property, plant and equipment, and intangible assets. Various other asset and liability accounts had measurement period adjustments related to deferred taxes.

The preliminary fair value of identifiable intangible assets related to the 2013 Acquired Companies is shown in the table below (dollars in thousands). For those intangible assets with finite lives, the acquisition-date fair values will be amortized over their respective estimated future lives utilizing the straight-line method.

	Weighted-Average Life	Acquisition-Date Fair Value
Trademarks	Indefinite	$	40
Technology	22 years		1,540
Customer relationships	17.5 years		5,840
Non-compete agreements	2 years		160
Total identifiable intangible assets acquired		$	7,580

The results of operations of the 2013 Acquired Companies have been included in the Company’s consolidated financial statements for the period subsequent to their respective acquisition dates. During the year ended December 31, 2013, the 2013 Acquired Companies contributed $68.6 million of revenue and $9.2 million of net earnings to the Company’s consolidated financial results.

The unaudited pro forma information below presents the combined operating results of the Company and the 2013 Acquired Companies. The unaudited pro forma results are presented for illustrative purposes only. They do not reflect the realization of any potential cost savings, or any related integration costs. Certain cost savings may result from the 2013 Acquisitions; however, there can be no assurance that these cost savings will be achieved. These pro forma results do not purport to be indicative of the results that would have actually been obtained if the 2013 Acquisitions had occurred as of January 1, 2012, nor is the pro forma data intended to be a projection of results that may be obtained in the future. The following unaudited pro forma consolidated results of operations assume that the acquisitions of the 2013 Acquired Companies were completed as of January 1, 2012. The pro forma results noted below for 2012 also include the effects of the 2012 Acquisitions discussed below. The 2013 unaudited pro forma net earnings were adjusted to exclude $0.9 million ($0.6 million after tax)of acquisition-related costs incurred in 2013 and $0.4 million ($0.4 million after tax) of nonrecurring expense related to the fair value adjustments to acquisition-date inventory. The 2012 unaudited pro forma net earnings were adjusted to include these charges (dollars in thousands except per share data):

	Year Ended December 31,
	2013		2012

Revenue	$	374,153	$	376,921
Net earnings		17,774		8,800
Earnings per Class A common share - basic and diluted		1.48		0.69
Earnings per Class B common share - basic and diluted		1.58		0.76

2012 Acquisitions:

On March 9, 2012, the Company completed its acquisition of 100% of the issued and outstanding capital stock of GigaCom with a cash payment of $2.7 million (£1.7 million). GigaCom, located in Gothenburg, Sweden, is a supplier of expanded beam fiber optic technology. GigaCom has become part of Bel’s Cinch Connector business. Management believes that GigaCom’s offering of expanded beam fiber optic (“EBOSA®”) products will enhance the Company’s position within the growing aerospace and military markets.

On July 31, 2012, the Company completed its acquisition of 100% of the issued and outstanding capital stock of Fibreco with a cash payment, net of $2.7 million of cash acquired, of $13.7 million (£8.7 million). Fibreco, located in the United Kingdom, is a supplier of a broad range of expanded beam fiber optic components for use in military communications, outside broadcast and offshore exploration applications. Fibreco has become part of Bel’s interconnect product group under the Cinch Connector business. Management believes that the addition of Fibreco’s fiber optic-based product line to Cinch’s broad range of copper-based products will increase Cinch’s presence in emerging fiber applications within the military, aerospace and industrial markets. In addition, management believes the acquisition provides access to a range of customers for the recently acquired GigaCom EBOSA® product.

On September 12, 2012, the Company completed its acquisition of 100% of the issued and outstanding capital stock of Powerbox, now known as Bel Power Europe, with a cash payment, net of $0.2 million of cash acquired, of $3.0 million. The Company also granted 30,000 restricted shares of the Company’s Class B common stock in connection with this acquisition. Compensation expense equal to the grant date fair value of these restricted shares of $0.6 million is being recorded ratably through September 2014. Bel Power Europe, located near Milan, Italy, develops high-power AC-DC power conversion solutions targeted at the broadcasting market. The acquisition of Bel Power Europe will allow Bel to expand its portfolio of power product offerings to include AC-DC products and will also establish a European design center located close to several of Bel’s existing customers.

During the years ended December 31, 2013 and 2012, the Company incurred $0.2 million and $0.8 million of acquisition-related costs relating to the 2012 acquisitions. These costs are included in selling, general and administrative expense in the accompanying consolidated statements of operations for the year ended December 31, 2012.

During the year ended December 31, 2012, the Company completed the purchase accounting related to the GigaCom and Fibreco acquisitions. During the third quarter of 2013, the Company completed the purchase accounting related to its acquisition of Bel Power Europe. The following table reflects the finalized acquisition date fair values of the consideration transferred and identifiable net assets acquired related to the 2012 acquisitions (in thousands):

				Measurement			Acquisition-Date
	Acquisition-Date			Period			Fair Values
	Fair Values			Adjustments			(As finalized)
Cash and cash equivalents	$	2,991		$	-		$	2,991
Accounts receivable		3,750			3			3,753
Inventories		1,061			(16	)		1,045
Other current assets		90			-			90
Property, plant and equipment		502			263			765
Intangible assets		30			11,626			11,656
Total identifiable assets		8,424			11,876			20,300

Accounts payable		(1,702	)		-			(1,702	)
Accrued expenses		(1,736	)		-			(1,736	)
Notes payable		(216	)		-			(216	)
Income taxes payable		(264	)		(60	)		(324	)
Deferred income tax liability, current		(70	)		-			(70	)
Deferred income tax liability, noncurrent		-			(2,700	)		(2,700	)
Other long-term liabilities		(216	)		-			(216	)
Total liabilities assumed		(4,204	)		(2,760	)		(6,964	)
Net identifiable assets acquired		4,220			9,116			13,336
Goodwill		17,965			(8,900	)		9,065
Net assets acquired	$	22,185		$	216		$	22,401


Cash paid	$	22,138			263		$	22,401
Deferred consideration		47			(47	)		-
Fair value of consideration transferred	$	22,185		$	216		$	22,401

The fair value of identifiable intangible assets related to the 2012 Acquired Companies is shown in the table below (dollars in thousands). For those intangible assets with finite lives, the acquisition-date fair values will be amortized over their respective estimated future lives utilizing the straight-line method.

	Weighted-Average Life	Acquisition-Date Fair Value
Trademarks	Indefinite	$	1,264
Technology	20 years		6,542
Customer relationships	16 years		3,292
Non-compete agreements	2 years		558
Total identifiable intangible assets acquired		$	11,656

The results of operations of the 2012 Acquired Companies have been included in the Company’s consolidated financial statements for the periods subsequent to their respective acquisition dates. During the years ended December 31, 2013 and 2012, Fibreco and Bel Power Europe contributed combined revenues of $10.7 million and $3.1 million, respectively, and combined net earnings of $1.0 million and $0.2 million, respectively, to the Company’s consolidated financial results. The acquisition of GigaCom has contributed to Bel’s research and development efforts, and its technology has been incorporated into products now being sold by Fibreco. GigaCom incurred expenses, primarily related to research and development, of $1.0 million and $0.6 million during the years ended December 31, 2013 and 2012, respectively.