ACQUISITION

12 Months Ended

Sep. 30, 2011

Business Combination Disclosure [Text Block]

NOTE 2 — ACQUISITION

On September 30, 2010, Griffon purchased all of the outstanding stock of CHATT Holdings, Inc. (“ATT Holdings”), the parent of ATT, on a cash and debt-free basis, for $542,000 in cash, subject to certain adjustments (the “Purchase Price”). ATT is a global provider of non-powered lawn and garden tools, wheelbarrows, and other outdoor work products to the retail and professional markets. ATT’s brands include Ames®, True Temper®, Ames True Temper®, Garant®, Union Tools®, Razor-back®, Jackson®, Hound Dog® and Dynamic Design^TM. ATT’s brands hold the number one or number two market positions in their respective major product categories. The acquisition of ATT expands Griffon’s position in the home and building products market and provides Griffon the opportunity to recognize synergies with its other businesses.

In connection with the ATT acquisition, Clopay Ames True Temper Holding Corp. (“Clopay Ames”), a subsidiary of Griffon, entered into a $375,000 secured term loan facility (“Term Loan”) and a new $125,000 Asset Based Lending Agreement (“New ABL”). The acquisition, including all related transaction costs, was funded by proceeds of the Term Loan, $25,000 drawn under the New ABL, and $168,000 of Griffon cash. ATT’s previous outstanding debt was defeased in connection with the acquisition.

ATT’s results of operations are not included in the Griffon consolidated statements of operations or cash flows, or footnotes relating thereto prior to October 1, 2010, except where explicitly stated as pro-forma results. The Griffon consolidated balance sheet at September 30, 2010 and related notes thereto include ATT’s balances at that date.

The accounts of the acquired company, after adjustments to reflect fair market values assigned to assets and liabilities, have been included in the consolidated financial statements from the date of acquisition.

The following table summarizes the final fair values of the assets acquired and liabilities assumed as of the date of the acquisition and the amounts assigned to goodwill and intangible asset classifications:

	2010
Current assets, net of cash acquired	$	195,214
PP&E		72,752
Goodwill *		264,592
Intangibles		203,290
Other assets		1,124
Total assets acquired		736,972
Total liabilities assumed		(194,972	)
Net assets acquired	$	542,000

The amounts assigned to goodwill and major intangible asset classifications by segment for the acquisition are as follows:

	2010		Amortization Period (Years)
Goodwill (non-deductible) *	$	264,592	N/A
Tradenames (non-deductible)		76,090	Indefinite
Customer relationships (non-deductible)		127,200	25
	$	467,882

*During 2011, acquisition date Goodwill was increased $3,528, due to the prospective federal consolidated tax reporting of ATT and GFF, and accounting for the completion of ATT’s 2010 federal tax return, and finalization of certain accrual and fixed asset valuations.

Pro Forma Information

The following unaudited pro forma information illustrates the effect on Griffon’s revenue and net earnings for the twelve-month period ended September 30, 2010, assuming that the acquisition had taken place on October 1, 2008.

	Years Ended September 30,
	2010			2009
Revenue from continuing operations:
As reported	$	1,293,996	$	1,194,050
Pro forma		1,737,630		1,659,524
Net earnings from continuing operations:
As reported	$	9,504	$	17,918
Pro forma		16,885		22,690
Diluted earnings per share from continuing operations:
As reported	$	0.16	$	0.30
Pro forma		0.28		0.38
Average shares - Diluted (in thousands)		59,993		59,002

These pro forma results have been prepared for comparative purposes only and include certain adjustments to actual financial results for the period presented, such as imputed financing costs, and estimated additional amortization and depreciation expense as a result of intangibles and fixed assets acquired, measured at fair value. They do not purport to be indicative of the results of operations that actually would have resulted had the acquisition occurred on the date indicated or that may result in the future.