Acquisitions

12 Months Ended

Mar. 31, 2011

Acquisitions

Acquisitions

4. Acquisitions

        In accordance with the accounting standards regarding business combinations, the results of acquired businesses are included in ATK's consolidated financial statements from the date of acquisition. The purchase price for each acquisition is allocated to the acquired assets and liabilities based on fair value. The excess purchase price over estimated fair value of the net assets acquired is recorded as goodwill.

        On April 9, 2010, ATK acquired Blackhawk Industries Products Group Unlimited, LLC ("Blackhawk"), a manufacturer of high quality tactical gear, for a purchase price of $172,251. ATK believes that the acquisition provides ATK with a leading tactical systems brand, an expanded portfolio of quality products, and additional design and development expertise for innovative tactical accessories which will strengthen ATK's position in tactical accessories and equipment for domestic and international military, law enforcement, security, and sport enthusiast markets. Blackhawk employs approximately 300 employees and is included in the Security and Sporting group. The purchase price allocation was completed in fiscal 2011. Most of the goodwill generated in this acquisition will be deductible for tax purposes. Subsequent to the April 2010 acquisition, ATK has recorded sales of approximately $83,700 and income before interest, income taxes, and noncontrolling interest of approximately $10,500 associated with the operations of this acquired business.

        On March 31, 2009, ATK acquired Eagle Industries ("Eagle"), a manufacturer of high-quality, individual operational nylon gear and equipment for military, homeland security, and law enforcement agencies for $63,000 net of cash acquired, subject to purchase price contingencies. During the second quarter of fiscal 2010, ATK received a preliminary purchase price adjustment of $5,002, as determined by a working capital adjustment identified in the audited financial statements. The company manufactures more than 5,000 products which include tactical assault vests, load-bearing equipment, weapon transporting gear, nylon holsters, personal gear carriers, and other high quality accessories. ATK believes that the acquisition provides an opportunity to expand its position in the domestic and international tactical accessories markets serving military and law enforcement customers. The purchase price allocation was completed during fiscal 2010. Most of the goodwill generated in this acquisition will be deductible for tax purposes.

        ATK used the purchase method of accounting to account for these acquisitions and, accordingly, the results of Blackhawk and Eagle are included in ATK's consolidated financial statements at the date of acquisition. The purchase price for the acquisitions has been allocated to the acquired assets and liabilities based on estimated fair value. Pro forma information on the results of operations for fiscal 2011, 2010 and 2009 as if the acquisitions had occurred at the beginning of fiscal 2009 is not being presented because the acquisitions are not material to ATK for that purpose.

        During fiscal 2003, ATK acquired the assets of Science and Applied Technology, Inc. (included in Missile Products). The sellers of this acquired business had the ability to earn up to an additional $7,500 of cash consideration if certain pre-specified milestones were attained with respect to one of the contracts acquired. The pre-specified milestones were met in September 2008 and the additional contingent consideration earned pursuant to the purchase agreement resulted in an increase to goodwill.

        ATK made no acquisitions during fiscal 2010.