Acquisitions and divestitures

2014 Acquisitions

During fiscal 2014, the Company acquired three businesses with historical annualized sales of approximately $492.0 million. Cash paid for acquisitions during fiscal 2014 was $116.9 million, net of cash acquired and contingent consideration. The Company has not disclosed the pro-forma impact of the fiscal 2014 acquisitions as such impact was not material.

The gross consideration for the acquisitions was $219.7 million, which consisted of the following (in thousands):



Cash paid	$	181,645
Contingent consideration	38,081
Total consideration	$	219,726

The contingent consideration arrangements stipulate that the Company pay up to a maximum of approximately $50.0 million of additional consideration to the former shareholders of the acquired businesses based upon the achievement of certain future operating results. The Company estimated the fair value of the contingent consideration using an income approach, which is based on significant inputs, primarily forecasted future operating results of the acquired businesses, not observable in the market and thus represents a Level 3 measurement as defined in ASC 820. The Company adjusts the fair value of contingent consideration within operating expenses as a result of the passage of time and if there are changes to the inputs used in the income approach.

The Company has not yet completed its evaluation and determination of the fair value of certain assets and liabilities acquired, primarily (i) the final assessment of working capital acquired and liabilities assumed, and (ii) the final valuation of certain income tax accounts. The Company expects these final valuations and assessments will be completed by the first quarter of fiscal 2015, which may result in adjustments to the preliminary values presented in the following table:



	Acquisition Method Values
	(Thousands)
Cash	$	64,763
Receivables	36,216
Inventories	95,202
Other current assets	6,597
Property, plant and equipment and other non-current assets	28,155
Intangible assets	53,502
Total identifiable assets acquired	284,435

Accounts payable, accrued liabilities and other current liabilities	(66,848		)
Short-term debt	(45,942		)
Other long-term liabilities	(14,535		)
Total identifiable liabilities assumed	(127,325		)
Net identifiable assets acquired	157,110
Goodwill	62,616
Net assets acquired	$	219,726

Goodwill of $52.0 million was assigned to the Electronics Marketing ("EM") reportable segment and goodwill of $10.6 million was assigned to the Technology Solutions ("TS") reportable segment. The goodwill recognized is attributable primarily to expected synergies of the acquired businesses. The amount of goodwill that is expected to be deductible for income tax purposes is not material. The Company periodically adjusts the value of goodwill to reflect changes that occur as a result of adjustments to the preliminary purchase price allocation during the measurement periods following the dates of acquisition.

The Company has recognized restructuring, integration, and other expenses associated with fiscal 2014 and other recent acquisitions, which are described further in Note 17.

2013 Acquisitions

During fiscal 2013, the Company acquired 12 businesses with aggregate annualized sales of approximately $1.18 billion for a total consideration of $309.0 million, which consisted of the following (in thousands):



Cash paid	$	297,484
Contingent consideration	11,467
Total consideration	$	308,951

The contingent consideration arrangements stipulate the Company pay up to a maximum of approximately $22.2 million of additional consideration to the former shareholders of the acquired businesses upon the achievement of certain operating results. The Company estimated the fair value of the contingent consideration using an income approach which is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in ASC 820. The Company adjusts the fair value of contingent consideration within operating expenses as a result of the passage of time and if there are changes to the inputs used in the income approach.

Cash paid for acquisitions during fiscal 2013 was $262.3 million, net of cash acquired, contingent consideration and purchase price holdback reserves.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the respective acquisition dates (in thousands):



Cash	$	29,276
Receivables	226,743
Inventories	91,791
Other current assets	33,689
Property, plant and equipment	25,311
Other assets	47,292
Total identifiable assets acquired	454,102

Accounts payable, accrued liabilities and other current liabilities	(157,986		)
Long-term debt	(66,367		)
Other long-term liabilities	(45,640		)
Total identifiable liabilities assumed	(269,993		)
Net identifiable assets acquired	184,109
Goodwill	157,521
Bargain purchase recognized	(32,679		)
Net assets acquired	$	308,951

Goodwill of $62.0 million was assigned to the EM reportable segment and goodwill of $95.5 million was assigned to the TS reportable segment. The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of the acquired businesses. The amount of goodwill that is expected to be deductible for income tax purposes is not significant. The Company periodically adjusts the value of goodwill to reflect changes that occur as a result of adjustments to the preliminary purchase price allocation during the measurement periods following the dates of acquisition.

Included in "Other assets" in the above table is $35.2 million of identifiable intangible assets (see Note 6) substantially all related to customer relationships.

Supplemental information on an unaudited pro forma basis, as if the fiscal 2013 acquisitions had been consummated as of July 3, 2011, is presented as follows:



	Pro Forma Results For Years Ended
	June 29, 2013		June 30, 2012
	(Millions)
Sales	$	25,771	$	26,872
Net income	$	454	$	587

With respect to the businesses acquired during fiscal 2013, the Company is unable to determine the amount of sales and earnings of each business subsequent to their respective acquisition dates as each business has been integrated into the Company.

Internix, Inc., a company publicly traded on the Tokyo Stock Exchange, was acquired in the first quarter of fiscal 2013 through a tender offer. After assessing the fair value of the identifiable assets acquired and liabilities assumed, the consideration paid was below fair value even though the price paid per share represented a premium to the trading levels at that time. During fiscal 2013, the Company recognized a gain on bargain purchase related to Internix of $32.7 million before and after tax and $0.23 per share on a diluted basis.

In addition to the acquisitions described above, during fiscal 2013, the Company acquired the remaining non-controlling interest in a consolidated subsidiary for a purchase price that was less than its carrying value. The Company has reflected the difference between the purchase price and the carrying value of the non-controlling interest as additional paid-in capital in the accompanying consolidated statement of shareholders' equity for fiscal 2013.

2012 Acquisitions

During fiscal 2012, the Company acquired 11 businesses with aggregate annualized sales of approximately $912.0 million for total consideration of $413.6 million, which consisted of the following (in thousands):



Cash paid	$	390,410
Contingent consideration	23,175
Total consideration	$	413,585

The contingent consideration arrangements stipulate the Company pay up to a maximum of approximately $124 million of additional consideration to the former shareholders of the acquired businesses upon the achievement of certain operating results. The Company estimated the fair value of the contingent consideration using an income approach which is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in ASC 820. The Company adjusts the fair value of contingent consideration within operating expenses as a result of the passage of time and if there are changes to the inputs used in the income approach.

Cash paid for acquisitions during fiscal 2012 was $313.2 million, net of cash acquired, contingent consideration and purchase price holdback reserves.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the respective acquisition dates (in thousands):



Cash	$	75,016
Receivables	132,195
Inventories	59,463
Other current assets	23,936
Property, plant and equipment	9,729
Other assets	104,368
Total identifiable assets acquired	404,707

Accounts payable, accrued liabilities and other current liabilities	(230,747		)
Other long-term liabilities	(2,483		)
Total liabilities assumed	(233,230		)
Net identifiable assets acquired	171,477
Goodwill	246,425
Bargain purchase recognized	(4,317		)
Net assets acquired	$	413,585

Goodwill of $180.0 million was assigned to the EM reportable segment and goodwill of $66.4 million was assigned to the TS reportable segment. The amount of goodwill that is expected to be deductible for income tax purposes is not significant. The Company periodically adjusts the value of goodwill to reflect changes that occur as a result of adjustments to the preliminary purchase price allocation during the measurement periods following the dates of acquisition.

Included in "Other assets" in the above table is $93.3 million of identifiable intangible assets (see Note 6).

Supplemental information on an unaudited pro forma basis, as if the acquisitions had been consummated as of July 3, 2011, is presented as follows:



	Pro Forma Results For Year Ended
	June 30, 2012
	(Millions)
Sales	$	26,052
Net income	$	568

With respect to the businesses acquired during fiscal 2012, the Company is unable to determine the amount of sales and earnings of each business subsequent to their respective acquisition dates as each business has been integrated into the Company.

Unidux Electronic Limited, a Singapore publicly traded company, was acquired in January 2012 through a tender offer. After assessing the fair value of the identifiable assets acquired and liabilities assumed, the consideration paid was below fair value even though the price paid per share represented a premium to the trading levels at that time. Accordingly, the Company recognized a gain on bargain purchase of $4.3 million before and after tax and $0.03 per share on a diluted basis.

Divestitures

During fiscal 2013, the Company divested a small business in TS Asia for which it recognized a loss of $1.7 million before and after tax and $0.01 per share on a diluted basis, which was classified within "Gain on legal settlement, bargain purchase and other."

During fiscal 2012, the Company recognized a loss of $1.4 million before tax, $0.9 million after tax and $0.01 per diluted share classified within "Gain on legal settlement, bargain purchase and other" in the consolidated statements of operations related to the impairment of an investment in a small technology company and the write-off of certain deferred financing costs associated with the early termination of a credit facility.