ACQUISITIONS

On September 9, 2016, Holly Hunt Enterprises, Inc. (“HOLLY HUNT^®”) completed the acquisition of Vladimir Kagan Design Group (“Vladimir Kagan”), known for its elegant, mid-century and contemporary designs. The aggregate purchase price for the acquisition was $8.5 million. The purchase price was funded from borrowings under the Company's revolving credit facility. The Company recorded the acquisition of Vladimir Kagan using the acquisition method of accounting and recognized the assets acquired and liabilities assumed at their fair values as of the date of the acquisition. The results of operations of Vladimir Kaganhave been included in the Company's Lifestyle segment beginning September 9, 2016.

On December 1, 2016, the Company completed the acquisition of DatesWeiser Furniture Corporation (“DatesWeiser”), a designer and manufacturer of contemporary wood conference and meeting room furniture. The aggregate purchase price for the acquisition was $11.0 million, plus certain contingent payouts of up to $4.0 million in the aggregate based on the future performance of the business. The purchase price was funded from borrowings under the Company's revolving credit facility. The Company recorded the acquisition of DatesWeiser using the acquisition method of accounting and recognized the assets acquired and liabilities assumed at their fair values as of the date of the acquisition. The results of operations of DatesWeiserhave been included in the Company's Lifestyle segment beginning December 1, 2016.

The results of Vladimir Kagan and DatesWeiser in 2016, as well as pro forma financial information, have not been presented as the financial impact of these acquisitions are not considered material for the year ended December 31, 2016.

On January 25, 2018, the Company acquired one hundred percent (100%) of the shares of Muuto Holding ApS and MIE4 Holding 5 ApS, which collectively hold all the business operations of Muuto ApS (“Muuto”). Muuto’s affordable luxury products span commercial and residential applications, adding scale and diversity to the Company’s business. The aggregate purchase price for the acquisition was $307.7 million, net of $7.6 million of cash acquired and subject to certain customary adjustments. The Company recorded the acquisition of Muuto using the acquisition method of accounting and recognized the assets acquired and liabilities assumed at their estimated fair values as of the date of acquisition. The results of operations of Muuto have been included in the Company’s Lifestyle segment beginning January 25, 2018. The Company funded the acquisition with borrowings from the Amended Credit Agreement as well as cash on hand. See Note 13 for information on the Company’s borrowings. The Company recorded acquisition and certain other costs of $5.1 million within selling, general, and administrative expenses in its Consolidated Statement of Operations and Comprehensive Income, during the twelve months ended December 31, 2018.

The amount of sales and net loss that resulted from the acquisition and attributable to Knoll, Inc. stockholders included in the Consolidated Statements of Operations and Comprehensive Income during the twelve month period ended December 31, 2018 were as follows (in thousands):

The following table summarizes the fair values assigned to the assets acquired and liabilities assumed and resulting goodwill as of the January 25, 2018 acquisition date (in thousands):



	Amounts Recognized as of Acquisition Date
Cash	$	7,605
Customer receivables	8,617
Inventory	11,085
Other current assets	453
Property, plant, and equipment, net	1,266
Intangible assets	135,600
Other non-current assets	296
Total assets acquired	$	164,922
Accounts payable	3,418
Other current liabilities	10,591
Deferred income taxes	29,919
Total liabilities assumed	$	43,928
Net assets acquired	$	120,994

Purchase price	$	315,313
Less: Fair value of acquired identifiable assets and liabilities	120,994
Goodwill	$	194,319

The excess of the purchase price over the net tangible and intangible assets is recorded to goodwill and primarily reflects the assembled workforce and expected synergies. Goodwill is not deductible for tax purposes.

The following table summarizes the estimated fair value of Muuto’s identifiable intangible assets and their estimated useful lives (in thousands):



	Fair Value as of January 25, 2018		Estimated Useful Life (in years)
Indefinite-lived intangible assets:
Trade name	$	66,000	Indefinite
Finite-lived intangible assets:
Wholesale customer relationships	35,800		15
Contract customer relationships	25,000		9
Copyrights & designs	7,500		7
Non-competition agreements	1,300		3
Total intangible assets	$	135,600

Unaudited pro forma information for the Company for the twelve months ended December 31, 2018 and 2017 as if the acquisition had occurred January 1, 2017 is as follows (in thousands):



	Twelve Months Ended December 31,
	2018		2017
Pro forma sales	$	1,306,420	$	1,203,158
Pro forma net earnings attributable to Knoll, Inc. stockholders	$	78,964	$	77,892

The unaudited pro forma financial information has been presented for illustrative purposes only and is not necessarily indicative of results of operations that would have been achieved had the acquisition taken place on the date indicated, or the future consolidated results of operations of the Company. The pro forma financial information presented above has been derived from the historical consolidated financial statements of the Company and from the historical consolidated financial statements of Muuto.

The pro forma financial information presented above include adjustments for: (1) incremental amortization expense related to fair value adjustments to identifiable intangible assets, (2) incremental interest expense for outstanding borrowings to reflect the terms of the Amended Credit Agreement, (3) nonrecurring items, (4) the tax effect of the above adjustments.

The pro forma information presented for the twelve months ended December 31, 2018 excludes expenses for future payments that are considered compensation for post combination service of $3.2 million, loss on debt extinguishment of $1.4 million, acquisition costs of $1.9 million, and acquisition-related inventory step-up valuation adjustment of $0.9 million, and includes incremental interest expense of $0.1 million and incremental amortization of intangibles of $0.8 million. The income tax impact of these adjustments for the twelve months ended December 31, 2018 was $1.3 million. The pro forma information presented for the twelve months ended December 31, 2017 includes incremental amortization of intangibles of $6.6 million, acquisition costs of $1.9 million, future payments that are considered compensation for post combination service of $3.5 million, incremental amortization of deferred financing fees of $1.2 million, incremental interest expense of $1.7 million, and an acquisition-related inventory step-up valuation adjustment of $0.9 million. The income tax impact of these adjustments for the twelve months ended December 31, 2017 was $4.6 million. The pro forma financial information does not include adjustments for potential future cost savings.

Twelve Months Ended December 31, 2018

Net Income (loss) attributable to Knoll, Inc. stockholders