Carolina Starches Acquisition

12 Months Ended

Aug. 31, 2013

Business Combinations [Abstract]

Carolina Starches Acquisition

Note 18 — Carolina Starches Acquisition

On January 11, 2012, Penford Carolina, LLC, a Delaware limited liability company (“Purchaser”) and a wholly-owned subsidiary of the Company, entered into an Amended and Restated Business Sale and Membership Interest Purchase Agreement (the “Amended and Restated Purchase Agreement”) providing for the purchase of Carolina Starches for $8.5 million in cash. Penford Carolina, LLC manufactures, markets and sells industrial cationic starches produced from potato, corn and tapioca into the paper and packaging industry. The acquisition of these businesses provides an important source of raw material to support continued growth in the Food Ingredients business and broadens the Company’s portfolio of specialty modified industrial starches.

The acquisition of Carolina Starches was accounted for as a business combination under the acquisition method. The final allocation of the purchase price to the assets acquired and liabilities assumed, based on their fair values as of January 11, 2012, is presented below. Goodwill represents the amount by which the purchase price exceeded the fair value of the net assets acquired and has been allocated to the Food Ingredients segment. It is estimated that all of the goodwill associated with this acquisition is deductible for tax purposes. Pro forma results of operations have not been included as the results were not significant to the historical periods.

(in thousands)
Property, plant and equipment	$	3,947
Working capital		4,225
Other assets		141
Intangible assets		290
Goodwill		81
Non-current liabilities		(184	)
Total purchase price	$	8,500