ACQUISITIONS

On February 3, 2014, the Company acquired Holly Hunt Enterprises, Inc. The acquisition advances the Company's strategy of building its global capability as a resource for high-design workplaces and homes, including the commercial contract, decorator to-the-trade and consumer markets. The aggregate purchase price for the acquisition was approximately $95.0 million, plus certain contingent payouts of up to $16.0 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 has recorded the acquisition of HOLLY HUNT^® using the acquisition method of accounting and has recognized the assets acquired and liabilities assumed at their fair values as of the date of the acquisition. The results of operations of HOLLY HUNT^®have been included in the Company's Studio segment beginning February 3, 2014.

The amount of net sales and net earnings attributable to Knoll, Inc. stockholders included in the condensed consolidated statement of operations and comprehensive income during the three months ended March 31, 2014 were as follows (in thousands):



	Three months ended March 31, 2014
Net sales	$	17,360
Net earnings attributable to Knoll, Inc. stockholders	$	1,106

The following table summarizes the preliminary fair values assigned to the assets acquired and liabilities assumed as of the February 3, 2014 acquisition date (in thousands):



Working Capital (1)	$	13,659
Property, plant and equipment	6,425
Intangible assets	45,529
Contingent consideration	(16,000		)
Noncontrolling interests	(218		)
Other liabilities	(504		)
Fair value of acquired identifiable assets	$	48,891

Purchase Price	$	95,000
Less fair value of acquired identifiable assets	48,891
Goodwill	$	46,109

(1) Working capital accounts include cash, customer receivables, inventories, prepaid expenses and other current assets, accounts payable, and other current liabilities

NOTE 2. ACQUISITIONS (continued)

These amounts are determined based on certain valuations and studies that have yet to be finalized, and accordingly, the assets acquired and liabilities assumed, as detailed above, are subject to adjustment once the detailed analyses are finalized. The goodwill recorded is deductible for income tax purposes.

The following table summarizes the preliminary fair value of intangible assets as of the acquisition date (in thousands):



	Fair Value		Weighted-Average Useful Life
Intangible assets:
Tradename	$	23,479	Indefinite
Non-competition Agreements	2,440		4
Customer Relationships	19,610		10
Total intangible assets	$	45,529

The Company recorded acquisition costs in its condensed consolidated statement of operations and comprehensive income, within selling, general, and administrative expenses, during the three months ended March 31, 2014 as follows (in thousands):



	Three months ended March 31, 2014
Accounting and legal fees	$	345
Other	275
	$	620

The following unaudited pro forma summary financial information presents the operating results of the combined company, assuming the acquisition had occurred as of January 1, 2013 (in thousands, except per share amounts):



	Three months ended March 31, 2014		Three months ended March 31, 2013
Pro forma net sales	$	237,152	$	222,010
Pro forma net earnings attributable to Knoll, Inc stockholders	$	8,612	$	6,468

The unaudited pro forma financial information is presented for illustrative purposes only and are not necessarily indicative of the results that would have been attained had the acquisition occurred on January 1, 2013, nor is it indicative of results of operations for future periods. The pro forma information presented for the three months ended March 31, 2014 and 2013, include adjustments for acquisition costs, interest expense that would have been incurred to finance the acquisition, amortization and depreciation.