Acquisition of Mann Packing |
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Mar. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of Mann Packing | Acquisition of Mann Packing On February, 26, 2018, we completed the acquisition of 100% of the voting interests of Mann Packing Company, Inc. and subsidiaries (“Mann Packing”). The results of Mann Packing's operations have been included in our consolidated financial statements since that date. This acquisition will expand our fresh-cut, vegetable and prepared product offerings in North America. We purchased all of its outstanding capital stock for an aggregate consideration of $372.9 million funded by a $229.7 million three-day promissory note and $143.2 million in cash funded through borrowings under our Credit Facility (as defined in Note 12 “Long-Term Debt and Capital Lease Obligations”). The three-day promissory note was settled with cash on hand and additional borrowings under our Credit Facility. Based on an evaluation of the provisions of ASC Business Combinations ("Topic 805"), the purchase price allocation reflected in the accompanying financial statements is preliminary and is based upon estimates and assumptions that are subject to change within the measurement period. Topic 805 allows entities a measurement period of up to one year from the acquisition date to finalize the allocation. The measurement period remains open pending the completion of valuation procedures related to the acquired tangible and intangible assets and assumed liabilities. The $328.8 million allocated to goodwill on our Consolidated Balance Sheets represents the excess of the purchase price over the preliminary values of assets acquired and liabilities assumed and is subject to revision. We are still evaluating our reportable segments and have preliminary included the goodwill related to this acquisition in the other fresh produce segment. We are still evaluating the tax implications of this transaction. We recognized $2.5 million of acquisition related costs which primarily consist of advisory, legal, accounting, valuation, other professional and consulting fees and are included in asset impairment and other charges (credits), net. Refer to Note 4 “Asset Impairment and Other Charges (Credits), Net". 5. Acquisition of Mann Packing (continued) The following table summarizes the preliminary estimated fair values of the net assets acquired and liabilities assumed at the date of the acquisition:
The Mann Packing acquisition includes a put option exercisable by the 25% shareholder of one of the acquired subsidiaries. The put option allows the noncontrolling shareholder to sell its 25% noncontrolling interest to us for a multiple of the subsidiary's adjusted earnings. The noncontrolling shareholder can exercise this put option on or after April 1, 2023. Following a 5-year window expiring on April 1, 2028, the put option value will be negotiated annually and the inputs are subject to change. As the put option is outside of our control, the estimated redemption value of the 25% noncontrolling interest is presented as a redeemable noncontrolling interest outside of permanent equity on our Consolidated Balance Sheets. The fair value assigned to this interest at acquisition date is subject to change and is pending completion. Refer to Note 7, “Redeemable Noncontrolling Interests”, for further discussion. 5. Acquisition of Mann Packing (continued) Our consolidated results include the following unaudited financial information of Mann Packing:
The following unaudited pro forma combined financial information presents our results including Mann Packing as if the business combination had occurred at the beginning of fiscal year 2017:
(1)Unaudited pro forma results for the quarter ended March 30, 2018 were positively adjusted by $9.4 million consisting of $11.3 million of nonrecurring transaction related compensation benefits, advisory, legal, accounting, valuation and other professional fees, partially offset by $1.9 million of interest expense as a result of increased borrowings under our Credit Facility. (2)Unaudited pro forma results for the quarter ended March 31, 2017 was adjusted to include $2.6 million of interest expense as a result of increased borrowings under our Credit Facility. |