Engine Controls Acquisition

9 Months Ended

Sep. 30, 2011

Engine Controls Acquisition [Abstract]

Note 3. Engine Controls Acquisition

In April 2011, we acquired the Engine Controls business of BLD Products, Ltd., a subsidiary of Qualitor Inc., for $27 million in cash funded by our revolving line of credit. As part of the acquisition, we acquired certain assets and assumed certain liabilities of BLD's Engine Controls business in Holland, Michigan, and acquired 100% of the equity of Novo Products Inc. located in Ocala, Florida. The acquired business is a manufacturer of a range of products including fuel pressure regulators, air by-pass valves, idle air control valves, and PCV valves. Revenues generated from the acquired business were approximately $18 million for the year-ended December 31, 2010, of which approximately 40% of the volume was sold to us.

In connection with the purchase, $7.2 million was allocated to customer relationships and will be amortized on a straight line basis over the estimated useful life of 10 years. Goodwill of $12.9 million was allocated to the Engine Management Segment and is deductible for income tax purposes. The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed, based on their fair values (in thousands):

Purchase Price			$	26,984
Assets acquired and liabilities assumed:
Inventory	3,826
Other current assets	1,947
Property, plant and equipment, net	1,965
Intangible assets	7,200
Goodwill	12,867
Current liabilities	(821	)
Net assets acquired			$	26,984