Acquisitions

12 Months Ended

Dec. 31, 2019

Acquisitions

The Company has acquired a number of businesses during the past three years. The results of operations of these acquired businesses have been included in the consolidated results from the respective acquisition dates. The purchase prices for these acquisitions have been allocated to tangible and intangible assets and liabilities of the businesses based upon estimates of their respective fair values.

In the third quarter of 2018, the Company acquired Industrial Gas Springs Group Holdings Limited (“IGS”), a recognized designer, manufacturer and supplier of customized gas springs. IGS is headquartered in the United Kingdom, with distribution and assembly capabilities in the United States. Its diversified end markets include general industrial, transportation, aerospace, and medical, among others. The Company acquired IGS for an aggregate purchase price of 29,138 British pound sterling ($38,016) which includes adjustments under the terms of the Share Purchase Agreement, including 2,820 British pound sterling ($3,679) related to cash acquired. The acquisition was financed using cash on hand and borrowings under the Company's revolving credit facility. In connection with the acquisition, the Company recorded $14,098 of goodwill and $15,300 of intangible assets. See Note 7.

In the fourth quarter of 2018, the Company completed its acquisition of Gimatic S.r.l. (“Gimatic”). Gimatic designs and develops robotic grippers, advanced end-of-arm tooling systems, sensors and other automation components. Headquartered in Italy, Gimatic has a sales network extending across Europe, North America and Asia. Its diversified end markets include automotive, packaging, health care, and food and beverage, among others. The Company acquired Gimatic for an aggregate purchase price of 363,352 Euro ($411,024) which includes adjustments under the terms of the Sale and Purchase Agreement, including approximately 7,790 Euro ($8,812) related to cash acquired. The Company paid the aggregate purchase price in cash, using cash on hand and additional borrowings under the Company's existing revolving credit facility, including the utilization of funds made available through the accordion feature provided by the facility. In connection with the acquisition, the Company recorded $277,098 of goodwill and $158,800 of intangible assets. See Note 7.

The Company incurred $5,420 of acquisition-related costs during the year ended December 31, 2018 related to the IGS and Gimatic acquisitions. These costs include due diligence costs and transaction costs to complete the acquisition and have been recognized in the Consolidated Statements of Income as selling and administrative expenses.

The operating results of IGS and Gimatic have been included in the Consolidated Statements of Income since the dates of acquisition. For the year ended December 31, 2018, the Company reported $6,360 in net sales and an operating loss of $1,726 at IGS, inclusive of $2,887 of short-term purchase accounting adjustments, and $8,793 in net sales and an operating loss of $2,109 at Gimatic, inclusive of $2,707 of short-term purchase accounting adjustments. IGS and Gimatic results have been included within the Industrial segment's operating profit. The operating results of IGS and Gimatic during 2019 have been included in the Consolidated Statements of Income for the year ended December 31, 2019.

The following table summarizes the fair values of the assets acquired, net of cash acquired, and liabilities assumed at the October 31, 2018 date of acquisition for Gimatic and the July 23, 2018 acquisition date for IGS.



	IGS			Gimatic
Accounts receivable	$	3,300		$	11,264
Inventories	5,706			15,386
Prepaid expenses and other current assets	198			7,743
Deferred income taxes	—			554
Property, plant and equipment, net	1,557			6,717
Goodwill (Note 7)	14,098			277,098
Other intangible assets, net (Note 7)	15,300			158,800
Other assets	—			144
Total assets acquired	40,159			477,706

Accounts payable	(927		)	(3,825		)
Accrued liabilities	(603		)	(13,640		)
Debt assumed	—			(5,540		)
Other liabilities	(678		)	(7,092		)
Deferred income taxes	(3,614		)	(45,397		)
Total liabilities assumed	(5,822		)	(75,494		)
Net assets acquired	$	34,337		$	402,212

The final purchase price allocations related to IGS and Gimatic reflect post-closing adjustments pursuant to the terms of the Share Purchase Agreement and the Sale and Purchase Agreement, respectively, and final valuation adjustments.

The following table reflects the unaudited pro forma operating results (the "Pro Forma Results") of the Company for the years ended December 31, 2018 and 2017, which give effect to the acquisitions of Gimatic and IGS as if they had occurred on January 1, 2017. The Pro Forma Results are based on assumptions that the Company believes are reasonable under the circumstances. The Pro Forma results are not necessarily indicative of the operating results that would have occurred had the acquisitions been effective January 1, 2017, nor are they intended to be indicative of results that may occur in the future. The underlying Pro Forma Results include the historical financial results of the Company, Gimatic and IGS adjusted for certain items including amortization expense associated with the assets acquired and the Company’s expense related to financing arrangements, with the related tax effects. The Pro Forma Results do not include the effects of any synergies or cost reduction initiatives related to the acquisitions.



	(Unaudited Pro Forma)
	2018		2017
Net Sales	$	1,555,481	$	1,501,515
Net Income	171,422		44,029

Pro forma earnings during the year ended December 31, 2018 were adjusted to exclude non-recurring items including acquisition-related costs and amortization related to the fair value adjustment to inventory. Pro forma earnings in 2017 were adjusted to include acquisition-related costs of $5,420 and amortization of $10,905 related to the fair value adjustments to inventory.

In the second quarter of 2017, the Company completed its acquisition of the assets of the privately held Gammaflux L.P. business ("Gammaflux"), a leading supplier of hot runner temperature and sequential valve gate control systems to the plastics industry. Gammaflux, which is headquartered in Virginia and has offices in Illinois and Germany, provides temperature control solutions for injection molding, extrusion, blow molding, thermoforming, and other applications. Its end markets include packaging, electronics, automotive, household products, medical, and tool building. The Company acquired the assets of Gammaflux for an aggregate purchase price of $8,866, which was financed using cash on hand and borrowings under the Company's revolving credit facility. The purchase price includes adjustments under the terms of the Asset Purchase Agreement,

including $2 related to cash acquired. In connection with the acquisition, the Company recorded $1,535 of goodwill and $3,700 of intangible assets. See Note 7.

The Company incurred $210 of acquisition-related costs during the year ended December 31, 2017 related to the Gammaflux acquisition. These costs include due diligence costs and transaction costs to complete the acquisition and have been recognized in the Consolidated Statements of Income as selling and administrative expenses.

The operating results of Gammaflux since the date of acquisition have been included in the Consolidated Statements of Income for the period ended December 31, 2017. The Company reported $9,081 in net sales for Gammaflux for the year ended December 31, 2017. Gammaflux results have been included within the Industrial segment's operating profit.