Business Acquisitions

12 Months Ended

Aug. 31, 2013

Business Combinations [Abstract]

Business Acquisitions

16. Business Acquisitions

On July 1, 2013, the Company completed its acquisition of Nypro by acquiring 100% of the issued and outstanding common shares of Nypro for net aggregate consideration of $679.5 million, which was funded from available cash. Nypro is a provider of manufactured precision plastic products for customers in the healthcare, packaging and consumer electronics industries. Nypro has advanced capabilities in product design, tooling, injection molding, surface decoration and complete product manufacturing.

The acquisition of Nypro has been accounted for as a business combination using the acquisition method of accounting. The following table (in thousands) summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition. The allocation of the purchase price is considered preliminary pending final valuation by the Company for property, plant and equipment, intangible assets, noncontrolling interests and tax adjustments.

Cash	$	77,384
Other current assets		343,446
Property, plant and equipment		282,599
Intangible assets		196,800
Goodwill		335,871
Other assets		28,304
Current liabilities		(322,397	)
Long-term deferred tax liability		(153,030	)
Other liabilities		(72,906	)
Noncontrolling interests		(36,548	)
Net assets acquired	$	679,523

The excess of the purchase price over the fair value of the acquired assets and assumed liabilities of $335.9 million was recorded to goodwill and was assigned fully to the DMS reportable segment. The goodwill is not expected to be deductible for tax purposes.

The $196.8 million of acquired intangible assets include $72.5 million assigned to customer relationships with an assigned useful life of up to 14 years, $52.7 million assigned to intellectual property with an assigned useful life of up to nine years and $71.6 million assigned to an indefinite-lived trade name.

During the fiscal year ended August 31, 2013, the Company expensed transaction costs of $13.5 million related to the Nypro acquisition within the Consolidated Statement of Operations.

The results for the fiscal year ended August 31, 2013 included results from Nypro between July 1, 2013 and August 31, 2013. During this period, Nypro contributed $183.2 million in revenue and $(8.8) million of net income to the Company’s Consolidated Statements of Operations. The following unaudited pro forma financial information for the fiscal years ended August 31, 2013 and 2012 represent the combined results of the Company’s operations as if the Nypro acquisition had occurred on September 1, 2011 (in thousands, except earnings per share).

	Pro forma Fiscal Year Ended August 31,
	2013		2012
Net revenue	$	19,238,000	$	18,275,067
Net income	$	290,838	$	473,791
Earnings per share, basic	$	1.43	$	2.30
Earnings per share, diluted	$	1.40	$	2.24

Pro forma earnings for the fiscal years ended August 31, 2013 and 2012 were adjusted by $(75.2) million and $89.3 million, respectively, for recurring changes in amortization, interest expense and income taxes related to the acquisition and certain non-recurring acquisition costs and income taxes associated with a repatriation of foreign earnings to the U.S. The pro forma earnings do not include any adjustments for cost savings and other synergy benefits.

On December 1, 2011, the Company completed its acquisition of Telmar by acquiring 100% of the issued and outstanding common shares of Telmar for approximately $128.9 million in cash. Telmar is a global provider of services and solutions for network service providers and enterprise and original equipment manufacturers. The acquisition of Telmar is expected to enhance the Company’s position in the telecommunications manufacturing and reverse logistics sector.

The acquisition of Telmar has been accounted for as a business combination using the acquisition method of accounting. Pro forma information has not been provided as the acquisition of Telmar is not deemed to be significant. Assets acquired of $184.2 million, including $60.9 million in goodwill and $49.9 million in finite-lived intangible assets, and liabilities assumed of $55.3 million were recorded at their estimated fair values as of the acquisition date.

The excess of the purchase price over the fair value of the acquired assets and assumed liabilities of $60.9 million was recorded to goodwill and was assigned fully to the DMS reportable segment.

During the second quarter of fiscal year 2011, the Company completed its acquisition of F-I Holding Company, which directly or indirectly wholly owns the Competence Sites. The Competence Sites were former operations of the Company and were previously disposed of during the fourth quarter of fiscal year 2010. Refer to Note 15 - “Loss on Disposal of Subsidiaries” for further discussion of the previous disposition. In order to reestablish viable operations, including the preservation of the Company’s relationship with certain global customers that the Company continued to serve outside of its former French and Italian operations and jobs of former employees, the Company acquired the entities owning the Competence Sites following multiple breaches by the third party purchaser. The acquisition added approximately 1,500 employees to the Company.

In exchange for cash of approximately $0.5 million and certain mutual conditional releases, the Company acquired a 100% equity interest in the Competence Sites. Simultaneously, with this transaction, the Company recorded a settlement of pre-existing receivables and other relationships with a fair value of $22.3 million that were outstanding at the time of acquisition.

During the second quarter of fiscal year 2011, immediately prior to the acquisition of the Competence Sites, the Company recognized a charge of $12.7 million in order to record $35.0 million in receivables and other relationships with the Competence Sites at their respective fair values. This charge is included in settlement of receivables and related charges within the Consolidated Statement of Operations for fiscal year 2011. The fair values of these receivables and other obligations were determined based on the probability evaluation of multiple scenarios under which the Competence Sites could settle these liabilities.

The acquisition of the Competence entities has been accounted for as a business combination using the acquisition method. Assets acquired of $131.4 million and liabilities assumed of $108.6 million were recorded at their estimated fair values as of the acquisition date. The $7.1 million excess of purchase price over the tangible assets and assumed liabilities, based on the exchange rate on the date of acquisition, was recorded as goodwill within the E&I reportable segment.