Business Combinations

12 Months Ended

Sep. 01, 2012

Business Combinations [Abstract]

Business Combinations

5. BUSINESS COMBINATIONS

On January 31, 2012, the Company acquired certain assets and assumed 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 fiscal year ending September 1, 2012, $20,126 of revenue and $1,554 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.

The acquisition of ATS was accounted for as a business purchase pursuant to ASC Topic 805, "Business Combinations" ("ASC 805"). Acquisition-related expenses totaling $2,223 have been recorded as operating expenses in the Company's consolidated statement of income for the fiscal year ending September 1, 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 for the acquisition was $32,204.

The purchase price allocation is summarized in the following table:

Inventory	$	3,487
Accounts Receivable		4,330
Intangible Assets		12,808
Goodwill		11,693
Property, Plant and Equipment		336
Other Assets		184
Total Assets Acquired	$	32,838
Total Liabilities Assumed		634
Net Assets Acquired	$	32,204

Acquired intangible assets with a fair value of $12,808, consisted primarily of customer relationships of $11,700 with a useful life of 8 years. The goodwill amount of $11,693 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. Pro forma information related to the acquisition is not presented because the impact of the acquisition, either individually or in the aggregate, on the Company's consolidated results of operations is not considered to be significant.

In addition, the Company recorded a post closing working capital adjustment in the amount of $1,247, which was paid out to the sellers of American Tool Supply, Inc. in October 2011, related to the acquisition closed in fiscal 2011.