Note 2 - Acquisitions

3 Months Ended

Mar. 04, 2017

Notes to Financial Statements

Business Combination Disclosure [Text Block]

Note

2:

Acquisitions

Wisdom Adhesives

On

January

27,

2017,

we acquired substantially all of the assets of H.E. Wisdom & Sons, Inc. and its affiliate Wisdom Adhesives Southeast, L.L.C., (“Wisdom Adhesives”) headquartered in Elgin, Illinois. Wisdom Adhesives is a provider of adhesives for the packaging, paper converting and assembly markets. The acquisition will help strengthen our position in the North America adhesives market.

The purchase price of

$123,305

was financed through borrowings on our revolving credit facility and was recorded in our Americas Adhesives operating segment. We incurred acquisition related costs of approximately

$547,

which were recorded as selling, general and administrative (“SG&A”) expenses in the Condensed Consolidated Statements of Income for the

three

months ended

March

4,

2017.

The acquisition fair value measurement was preliminary as of

March

4,

2017,

subject to the completion of the valuation of Wisdom Adhesives and further management reviews and assessment of the preliminary fair values of the assets acquired and liabilities assumed. We expect the fair value measurement process to be completed when the final appraisals are available, but no later than

twelve

months from the acquisition date.

The following table summarizes the preliminary fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

	Amount
Current assets	$	13,729
Property, plant and equipment		10,516
Goodwill		60,313
Other intangibles
Customer relationships		33,300
Trademarks/trade names		13,600
Current liabilities		(8,153	)
Total purchase price	$	123,305

The preliminary expected lives of the acquired intangible assets are

15

years for customer relationships and

10

years for trademarks/trade names.

Based on the preliminary fair value measurement of the assets acquired and liabilities assumed, we allocated

$60,313

to goodwill for the expected synergies from combining Wisdom Adhesives with our existing business. Such goodwill is deductible for tax purposes. The goodwill was assigned to our Americas Adhesives operating segment. The Wisdom Adhesives acquisition does not represent a material business combination, therefore pro forma financial information is not provided.

Cyberbond

On

June

8,

2016,

we acquired Cyberbond, L.L.C., (“Cyberbond”) headquartered in Batavia, Illinois with operations in the United States and Europe. Cyberbond is a provider of industrial adhesives for the electronics, medical, audio equipment, automotive and structural markets. The acquisition will help us to broaden our global position and accelerate our growth in the high margin, high growth Engineering Adhesives segment.

The purchase price of

$42,182,

net of cash acquired of

$332,

was funded through existing cash and was recorded in our Engineering Adhesives operating segment. We incurred acquisition related costs of approximately

$527,

which were recorded as SG&A expenses in the Condensed Consolidated Statements of Income for the year ended

December

3,

 

2016.

The following table summarizes the final fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

	Amount
Current assets	$	4,425
Property, plant and equipment		2,038
Goodwill		23,654
Other intangibles
Developed technology		2,000
Customer relationships		14,400
Trademarks/trade names		700
Other assets		161
Current liabilities		(1,889	)
Long-term liabilities		(3,307	)
Total purchase price	$	42,182

The expected lives of the acquired intangible assets are

seven

years for developed technology,

15

years for customer relationships and

10

years for trademarks/trade names.

Based on the fair value measurement of the assets acquired and liabilities assumed, we allocated

$23,654

to goodwill for the expected synergies from combining Cyberbond with our existing business. Such goodwill is not deductible for tax purposes. The goodwill was assigned to our Engineering Adhesives operating segment. The Cyberbond acquisition does not represent a material business combination, therefore pro forma financial information is not provided.

Advanced Adhesives

On

April

29,

2016,

we acquired Advanced Adhesives Pty Limited and the business assets of Advanced Adhesives (New Zealand) Limited (together referred to as “Advanced Adhesives”), providers of industrial adhesives in Australia and New Zealand. The acquisition will help us to strengthen our industrial adhesives market position and leverage a broader technology portfolio in both Australia and New Zealand. The combined purchase price of

$10,365

was funded through existing cash and was recorded in our Asia Pacific operating segment. We incurred acquisition related costs of approximately

$646,

which were recorded as SG&A expenses in the Condensed Consolidated Statements of Income for the year ended

December

3,

2016.

The following table summarizes the final fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

	Amount
Current assets	$	5,704
Property, plant and equipment		594
Goodwill		102
Other intangibles
Customer relationships		7,575
Trademarks/trade names		146
Current liabilities		(2,671	)
Long-term liabilities		(1,085	)
Total purchase price	$	10,365

The expected lives of the acquired intangible assets are

15

years for customer relationships and

one

year for trademarks/trade names.

Based on the fair value measurement of the assets acquired and liabilities assumed, we allocated

$102

to goodwill for the expected synergies from combining Advanced Adhesives with our existing business. Such goodwill is not deductible for tax purposes. The goodwill was assigned to our Asia Pacific operating segment. The Advanced Adhesives acquisition does not represent a material business combination, therefore pro forma financial information is not provided.