Acquisitions |
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Jun. 28, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisitions | Acquisitions Bassian On February 25, 2019, pursuant to an asset purchase agreement, the Company acquired substantially all of the assets of Bassian Farms, Inc. and certain affiliated entities (“Bassian”), a specialty protein manufacturer and distributor based in northern California. The aggregate purchase price for the transaction at acquisition date was approximately $31,990 and is subject to a customary working capital true-up. The acquisition was funded with $27,990 in cash and the issuance of a $4,000 unsecured convertible note. The Company will also pay additional contingent consideration, if earned, in the form of an earn-out amount which could total $9,000 over a four year period. The payment of the earn-out liability is subject to the successful achievement of certain gross profit targets. The Company estimated the fair value of this contingent earn-out liability to be $2,885 and $2,800 as of June 28, 2019 and February 25, 2019, respectively. During the second quarter of 2019, the Company updated the valuation of the tangible and intangible assets of Bassian as of the acquisition date. As a result, the Company recorded a measurement period adjustment that decreased goodwill by $2,098 mainly due to a $2,455 increase in fair value related to other intangible assets fair value and a $1,331 decrease in current liabilities, partially offset by a $1,280 decrease in the fair value of the earn-out liability. Customer relationships, non-compete agreement and trademarks are valued at fair value using Level 3 inputs and are being amortized over 15, 5 and 10 years, respectively. Goodwill for the Bassian acquisition will be amortized over 15 years for tax purposes. The goodwill recorded primarily reflects the value of acquiring an established meat processor to grow the Company's protein business in the West Coast region, as well as any intangible assets that do not qualify for separate recognition. The Company recognized professional fees of $210 in operating expenses related to the Bassian acquisition. The Company reflected net sales of $14,836 and $20,363 for Bassian in its consolidated statement of operations for the thirteen and twenty-six weeks ended June 28, 2019, respectively. The Company has determined that separate disclosure of Bassian earnings is impracticable due to the commencement of integration of the Bassian business into the Company's operations in the San Francisco market. The purchase price allocation of the Bassian acquisition is based on preliminary valuations and is subject to change as the Company obtains additional information during the measurement period. The table below sets forth the purchase price allocation of the Bassian acquisition:
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