Note 2 - Acquisition

9 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Business Combination Disclosure [Text Block]

2)     Acquisition

Northlake

On October 1, 2015, the Company acquired Northlake Engineering, Inc., (“Northlake”), a Wisconsin-based designer, manufacturer and distributor of high reliability electromagnetic products and solutions serving the North America power distribution and medical equipment markets. Northlake reports to our Electronics Products Group.

The Company paid $13.7 million in cash for 100% of the outstanding stock of Northlake and has preliminarily recorded intangible assets of $6.8 million, consisting of $4.1 million of customer relationships which primarily are expected to be amortized over a period of twelve and half years, $2.4 million of trademarks which are indefinite-lived and $0.3 million of non-compete which are expected to amortized over a period of five years. Acquired goodwill of $7.8 million is deductible for income tax. The Company anticipates finalizing the purchase price allocation during the current fiscal year.

The components of the fair value of the Northlake acquisition, including the allocation of the purchase price at March 31, 2016, are as follows (in thousands):

	Preliminary Allocation			Adjustments			Allocation at March 31, 2016
Fair value of business combination:
Cash payments	$	13,859		$	156		$	14,015
Less: cash acquired		(315	)		-			(315	)
Total	$	13,544		$	156		$	13,700
Identifiable assets acquired and liabilities assumed:
Current Assets	$	2,810		$	-		$	2,810
Property, plant, and equipment		1,407			-			1,407
Identifiable intangible assets		4,124			2,700			6,824
Goodwill		7,821			(2,700	)		5,121
Other non-current assets		158			-			158
Liabilities assumed		(2,620	)		-			(2,620	)
Expected final payments		(156	)		156			-
Total	$	13,544		$	156		$	13,700

Enginetics

On September 4, 2014, the Company acquired Enginetics Corporation (“Enginetics”), a leading producer of aircraft engine components for all major aircraft platforms. This investment complements our Engineering Technologies Group and allows us to provide broader solutions to the aviation market.

The Company paid $55.0 million in cash for 100% of the outstanding stock of MPE Aeroengines, Inc., of which Enginetics is a wholly owned subsidiary and has recorded intangible assets of $10.6 million, consisting of $9.1 million of customer relationships which are expected to be amortized over a period of fifteen years and $1.5 million of trademarks which are indefinite-lived. Acquired goodwill of $34.8 million is not deductible for income tax purposes due to the nature of the transaction. The Company finalized the purchase price allocation during the fourth quarter ended June 30, 2015.

The components of the fair value of the Enginetics acquisition, is as follows (in thousands):

	Final
Fair value of business combination:
Cash payments	$	55,021
Less: cash acquired		(113	)
Total	$	54,908
Identifiable assets acquired and liabilities assumed:
Current Assets	$	12,134
Property, plant, and equipment		8,808
Identifiable intangible assets		10,600
Goodwill		34,790
Other non-current assets		158
Liabilities assumed		(5,449	)
Deferred taxes		(6,133	)
Total	$	54,908

Ultrafryer

The Company paid a total of $23.0 million, in cash, to acquire all of the outstanding stock of Ultrafryer Systems, Inc. (“Ultrafryer”), a producer of commercial deep fryers for restaurant and commercial installations. The stock purchase agreement included, a $2.2 million disbursement made in September of 2014 related to the purchase of land and building associated with the business.

The Company’s recent acquisitions are strategically significant to the future growth prospects of the Company, however at the time of the acquisition and June 30, 2015, we concluded, that historical results of the acquired Companies both individually and in the aggregate, were immaterial to the Company’s consolidated financial results and therefore additional proforma disclosures are not presented.