Acquisitions of and Investments in Businesses and Technologies

9 Months Ended

Oct. 31, 2014

Business Combinations [Abstract]

Acquisitions of and Investments in Businesses and Technologies

ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES AND TECHNOLOGIES

Integra

Subsequent to the close of the fiscal 2015 third quarter, Raven acquired all of the issued and outstanding shares of Integra Plastics, Inc. (Integra), in a transaction that closed on November 3, 2014. The terms of the merger and reorganization agreement, valued at approximately $48,600, include the issuance of 1,541,696 shares of Raven common stock and cash payments of approximately $9,400 subject to a working capital adjustment, if any, to be determined no later than 90 days subsequent to the merger date. Integra, a privately held company with headquarters in Madison, SD specializes in the manufacture and conversion of high-quality plastic film and sheeting. This acquisition will immediately expand Raven's Engineered Films Division's (EFD) production capacity with additional extrusion and lamination operations in Brandon, SD and fabrication locations in Madison, SD and Midland, TX., as well as broaden EFD's product offerings and enhance current converting capabilities.

The initial valuation and purchase price allocation for this acquisition was not complete as of the date of filing of this Quarterly Report on Form 10-Q.

SBG

In May 2014, the Company completed the purchase of all issued and outstanding shares of SBG Innovatie BV and its affiliate, Navtronics BVBA (collectively, SBG). SBG has operations in the Netherlands just outside of Amsterdam and at Navtronics in Geel, Belgium. The acquisition broadens Applied Technology Division’s guided steering system product line by adding high-accuracy implement steering applications. Additionally, SBG’s headquarters will become the new home office for Raven in Europe, expanding the Company’s global presence and reach into key European markets.

In connection with the purchase, Raven paid $5,000 and agreed to pay up to $2,500 in additional earn-out payments calculated and paid quarterly over the next ten years contingent upon achieving certain revenues. The fair value of this contingent consideration at October 31, 2014 is $1,255, of which $236 was classified as "Accrued liabilities" and $1,019 was classified as "Other liabilities". The Company paid $37 in earn-out payments during the three and nine months ended October 31, 2014.

The fair value of the business acquired was allocated to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value acquired over the identifiable assets acquired and liabilities assumed is reflected as goodwill. Goodwill recorded as part of the purchase price allocation was $3,250. Identifiable intangible assets acquired as part of the acquisition were $2,104, including definite-lived intangibles, such as customer relationships and proprietary technology. Amortization is being computed over the estimated useful life using the undiscounted cash flows method - twelve years for customer relationships and five years for proprietary technology. Liabilities acquired included debts to the former owners, a long-term note with a third-party bank and deferred income taxes. There was no debt outstanding at October 31, 2014.