ACQUISITIONS

In an agreement dated June 6, 2014, between the Company and Bombas Leao S.A. ("Bombas Leao"), the Company acquired rights to 100 percent of the outstanding shares of Bombas Leao for a cash purchase price of approximately BRL 69.0 million, $30.7 million at the then current exchange rate, subject to certain terms and conditions. The Company also acquired debt and certain liabilities of Bombas Leao. The Company funded the acquisition with cash on hand and short-term borrowings from the Company's Revolver (see Note 11).

Bombas Leao, based in Monte Azul Paulista, State of Sao Paulo, Brazil, designs, manufactures, and distributes submersible groundwater pumping equipment through manufacturing and distribution facilities.

The Bombas Leao intangible assets of $26.5 million consist primarily of customer relationships, which will be amortized utilizing the straight line method over 20 years, and trade names, which are classified as indefinite lived assets and will not be amortized.

The preliminary goodwill of $5.2 million resulting from the Bombas Leao acquisition consists primarily of broadened product offerings and expanded customer base. All of the goodwill was recorded as part of the Water Systems segment and is not expected to be deductible for tax purposes.

The preliminary purchase price assigned to the major identifiable assets and liabilities for the acquisition is as follows:



(In millions)
Assets:
Cash acquired	$	0.9
Current assets	14.0
Property, plant, and equipment	2.1
Intangible assets	26.5
Goodwill	5.2
Other assets	3.2
Total assets	51.9
Liabilities	(21.2		)
Total consideration paid	$	30.7

The fair values of the Bombas Leao identifiable intangible assets and property, plant and equipment are provisional amounts as of June 28, 2014, pending final valuations and purchase accounting adjustments. The Company utilized management estimates and consultation with an independent third-party valuation firm to assist in the valuation process.

The results of operations of Bombas Leao were included in the Company's condensed consolidated statement of income, from the respective acquisition date through the second quarter ended June 28, 2014. The difference between actual sales for the Company and proforma sales including Bombas Leao as if they were acquired at the beginning of each period was not material as a component of the Company's consolidated sales for the six months ended June 28, 2014 and June 29, 2013, respectively. Due to the immaterial nature of the acquisition, the Company has not included full year proforma statements of income for the acquisition year and previous year.

Transaction costs were expensed as incurred under the guidance of FASB ASC Topic 805, Business Combinations. Transaction costs included in selling, general, and administrative expenses in the Company’s condensed consolidated statements of income for the six months ended June 28, 2014, were $0.9 million. No transaction costs were included in selling, general, and administrative expenses for the six months ended June 29, 2013.