ACQUISITIONS AND DIVESTITURE

12 Months Ended

Oct. 31, 2015

ACQUISITIONS AND DIVESTITURE

ACQUISITIONS AND DIVESTITURE

2 ACQUISITIONS AND DIVESTITURE

On November 14, 2014, during the first quarter of fiscal 2015, the company acquired substantially all of the assets (excluding accounts receivable) of the BOSS® professional snow and ice management business of privately held Northern Star Industries, Inc. Based in Iron Mountain, Michigan, BOSS designs, manufactures, markets, and sells a broad line of snowplows, salt and sand spreaders, and related parts and accessories for light and medium duty trucks, all terrain vehicles, utility terrain vehicles, skid steers, and front-end loaders. Through this acquisition, the company added another professional contractor brand; a portfolio of counter-seasonal equipment; manufacturing and distribution facilities located in Iron Mountain, Michigan; and a distribution network for these products. Management believes that this acquisition positions the company to strengthen and grow its relationships with professional contractors, municipalities, and other customers by enabling the company to provide them with innovative, durable equipment and high-quality service they need each season.

   The purchase price of this acquisition was $229,490, which included a cash payment of $198,329 and issuance of a note payable at fair value of $31,161. The company funded the acquisition with cash on hand, a $130,000 term loan, and short-term debt under the company's revolving credit facility. The purchase price of this acquisition was accounted for as a business combination using the acquisition method, which requires that, among other things, assets acquired and liabilities assumed, be recorded at their fair value as of the acquisition date using independent appraisals and other analyses. The excess of the consideration transferred over those fair values is recorded as goodwill. The following table presents the allocation of the purchase price to the acquired assets, liabilities, and goodwill.

Inventory	$	14,106
Prepaid expenses		266
Property, plant, and equipment		13,689
Intangible assets		107,700
Goodwill		103,028
Current liabilities		(9,299	)
Purchase price	$	229,490

   The goodwill recorded as part of the acquisition primarily reflects the value of the assembled workforce, anticipated cost synergies, expected future cash flows, and anticipated sales growth from integrating and expanding existing product lines. The amount of goodwill that is expected to be deductible for income tax purposes is $101,867. The goodwill and intangible assets have been allocated to the Professional segment.

   During fiscal 2015 and 2014, the company expensed $259 and $509, respectively, of acquisition-related costs, which was recorded in selling, general, and administrative expense. The company also capitalized $373 of debt issuance costs in other assets related to the $130,000 term loan, which will be amortized over the term of the loan.

   Operating results for this acquisition have been included in the company's consolidated statements of earnings from the November 14, 2014 date of acquisition and are reflected in the Professional segment. The sale of BOSS products contributed $128,515 of net sales and had an immaterial impact on net earnings for fiscal 2015. Proforma results are not presented, as the acquisition was not considered material to the company's consolidated results of operations.

   On November 27, 2013, during the first quarter of fiscal 2014, the company completed the acquisition of certain assets of a quality value-priced line of outdoor lighting fixtures for the landscape lighting market. The purchase price of this acquisition was $1,245, which included cash payments, issuance of a long-term note, and an estimated contingent consideration.

   On September 30, 2013, during the fourth quarter of fiscal 2013, the company completed the acquisition of certain assets and assumed certain liabilities for a company in China that manufactures water-efficient drip irrigation products, sprinklers, emitters, and filters for agriculture, landscaping, and green house production. The net purchase price of this acquisition was $3,481, of which $2,101 was paid in cash in fiscal 2013 and $1,380 was paid in cash in fiscal 2014.

   The purchase price of all of these acquisitions was allocated to the identifiable assets acquired and liabilities assumed based on estimates of their fair value, with the excess purchase price for acquisitions recorded as goodwill. Additional purchase accounting disclosures have been omitted given the immateriality of these acquisitions in relation to the company's consolidated financial condition and results of operations. See Note 5 for further details related to the acquired intangible assets.

   On November 27, 2015, in the first quarter of fiscal 2016, the company completed the sale of its Northwestern U.S. distribution company.