Business Combination

6 Months Ended

Feb. 25, 2012

Business Combination [Abstract]

Business Combination

Note 6. Business Combination

On January 31, 2012, the Company acquired certain assets and assume certain liabilities of ATS Industrial Supply, Inc. ("ATS"). ATS is a leading metalworking and MRO industrial distributor in the Rocky Mountain region with over 40 years' experience distributing a broad range of industrial tools, cutting tools, abrasives, machinery, precision instrument supplies, and other MRO-related supplies to a large customer base ranging from small machine shops and fabricators to some of the largest aerospace and manufacturing concerns in the country. The strategic combination adds to the Company's presence in this region and broadens the customer base. For the thirteen weeks ended February 25, 2012, $2,369 of revenue and $252 of income before income tax relating to the acquired ATS business were included in the condensed consolidated statements of income since the date of acquisition. Pro forma information is not included because ATS's operations would not have materially impacted the Company's results of operations.

The acquisition of ATS was accounted for as a business purchase pursuant to ASC Topic 805, "Business Combinations" ("ASC 805"). Acquisition-related expenses totaling $658 have been recorded as operating expenses in the Company's consolidated statement of income for the thirteen and twenty-six weeks ended February 25, 2012. As required by ASC 805-20, the Company allocated the purchase price to assets and liabilities based on their estimated fair value at the acquisition date. The cash purchase price, which is subject to finalization of certain post-closing adjustments, for the acquisition was $31,150. The preliminary purchase price allocation resulted in total assets acquired of $21,145, total liabilities assumed of $636, and $10,641 of goodwill. Acquired intangible assets consisted primarily of customer relationships with a fair value of $11,700 and a useful life of 8 years.

The goodwill amount of $10,641 represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The primary items that generated the goodwill were the premiums paid by the Company for the right to control the business acquired and the expected synergies. This goodwill will not be amortized and will be tested for impairment at least annually. All of the goodwill recognized as a result of the ATS acquisition is expected to be deductible for tax purposes and will be amortized for tax purposes over 15 years.