ACQUISITIONS

Acquisitions are recorded using the acquisition method of accounting and accordingly, results of their operations are included in the Company’s consolidated financial statements from the effective date of each respective acquisition. The Company negotiates the respective purchase prices of acquired businesses based on the expected cash flows to be derived from their operations after integration into the Company’s existing distribution, production and service networks. The acquisition purchase price for each business is allocated based on the fair values of the assets acquired and liabilities assumed. Management estimates the fair values of acquired intangible assets other than goodwill using the income approach (i.e. discounted cash flows), and plant and equipment using either the cost or market approach, depending on the type of fixed asset.

During the three months ended June 30, 2015, the Company acquired five businesses with aggregate historical annual sales of approximately $33 million, all of which were in the Distribution business segment. Transaction and other integration costs incurred during the three months ended June 30, 2015 were $1.2 million and were included in selling, distribution and administrative expenses in the Company’s consolidated statement of earnings. These acquisitions contributed approximately $4 million in net sales during the three months ended June 30, 2015.

Purchase price allocations for certain businesses most recently acquired during the three months ended June 30, 2015 are primarily based on provisional fair values and are subject to revision as the Company finalizes appraisals and other analyses. Final determination of the fair values may result in further adjustments to the values presented below. The following table summarizes the consideration transferred and the estimated fair values of the assets acquired and liabilities assumed for fiscal 2016 acquisitions, as well as adjustments to finalize the valuations of certain prior year acquisitions. Valuation adjustments related to prior year acquisitions were not significant.



(In thousands)
Consideration
Cash ^(a)	$	26,182

Recognized amounts of identifiable assets acquired and liabilities assumed
Current assets, net	$	4,409
Plant and equipment	3,523
Other intangible assets	11,840
Current liabilities	(4,255		)
Non-current liabilities	(1,219		)
Total identifiable net assets	14,298

Goodwill	11,884
	$	26,182

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^(a)	Includes cash paid, net of cash acquired, for current year acquisitions as well as payments for the settlement of holdback liabilities associated with prior year acquisitions.

The fair value of trade receivables acquired with fiscal 2016 acquisitions was $1.5 million, with gross contractual amounts receivable of $1.7 million. Goodwill associated with fiscal 2016 acquisitions was $11.8 million, of which $7.4 million is deductible for income tax purposes. Goodwill largely consists of expected synergies resulting from the acquisitions, including increased distribution density that will facilitate the sale of industrial, medical and specialty gases, and related supplies, and enhanced geographical coverage abroad to strengthen the Company’s welder and generator rental business. Other intangible assets related to fiscal 2016 acquisitions represent customer relationships and non-competition agreements, and amounted to $7.6 million and $4.3 million, respectively. See Note 5 for further information on goodwill and other intangible assets.

Pro forma results of operations have not been presented for these acquisitions since the impact is not material to the Company’s consolidated statements of earnings, either individually or in the aggregate.