Acquisitions And Divestitures

9 Months Ended

Jul. 01, 2011

Acquisitions And Divestitures

Acquisitions And Divestitures

(2) ACQUISITIONS AND DIVESTITURES:

Fiscal 2011

Acquisitions

On March 18, 2011, ARAMARK Clinical Technology Services, LLC, a subsidiary of the Company, purchased the common stock of the ultimate parent company of Masterplan, a clinical technology management and medical equipment maintenance company, for cash consideration of approximately $154.5 million. Also acquired in the transaction were ReMedPar, an independent provider of sourced and refurbished medical equipment parts, and MESA, an integrated repair and maintenance services provider in 12 European countries.

The Company followed the acquisition method of accounting in accordance with the accounting standard related to business combinations. The Company is in the process of finalizing its assessment of the fair value of the assets acquired and liabilities assumed. Inventory, property and equipment, intangible assets and deferred income taxes were based on preliminary valuation data and estimates. Accordingly, the fair values of these assets and liabilities are subject to change. The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed in the acquisition, based on the current best estimates of management:

	(in thousands)
Purchase consideration	$	154,544
Current assets	$	27,214
Current liabilities		(31,409	)
Property and equipment		3,986
Other intangible assets		33,702
Goodwill		134,905
Other assets		314
Long-term borrowings		(767	)
Deferred income taxes and other noncurrent liabilities		(13,401	)
	$	154,544

The goodwill arising from the acquisition consists largely of the growth opportunity the Company anticipates in the core businesses acquired and the cost savings and synergies the Company expects to realize in its clinical technology services business. None of the goodwill is expected to be deductible for tax purposes. All of the goodwill recorded is included in the Food and Support Services—North America segment.

For the three and nine months ended July 1, 2011, $29.6 million and $33.5 million of sales and ($1.9) million and ($2.1) million of net loss, respectively, were recorded in the Condensed Consolidated Statements of Operations related to the acquisition. During the nine months ended July 1, 2011, approximately $0.3 million of pretax transaction-related costs related to the acquisition were recorded in "Selling and general corporate expenses" in the Condensed Consolidated Statement of Operations.

Divestitures

During the second quarter of fiscal 2011, the Company completed the sale of its 67% ownership interest in the security business of its Chilean subsidiary for approximately $7.7 million in cash and future consideration of approximately $4 million. The transaction resulted in a pretax gain of approximately $6.4 million (net of tax gain of approximately $4.8 million), which is included in "Cost of services provided" in the Condensed Consolidated Statement of Operations. Final adjustments to the selling price are expected in the fourth quarter of fiscal 2011, which will result in additional consideration. The results of operations and cash flows associated with the security business were not material to the Company's consolidated operations and cash flows.

During the third quarter of fiscal 2011, the Company sold a noncontrolling interest in Seamless North America, LLC, an online and mobile food ordering service, for consideration of $50.0 million in cash (see Note 16).

Fiscal 2010

On October 30, 2009, ARAMARK Ireland Holdings Limited and ARAMARK Investments Limited, subsidiaries of the Company, completed the acquisition of the facilities management and property management businesses of Veris plc, an Irish company, for consideration of approximately $74.3 million in cash and the assumption of a pension liability of approximately $1.2 million. These business interests include Vector Workplace and Facility Management Ltd, Irish Estates (Facilities Management) Ltd, Irish Estates (Management) Ltd, Premier Management Company (Dublin) Ltd, Glenrye Properties Services Ltd, Spokesoft Technologies Ltd, Orange Support Services Ltd, Orange Environmental Building Services Ltd and Vector Environmental Services Ltd, all of which are companies that were owned by Veris plc. The facilities management business provides a broad range of facility and project management and consulting services for clients across a wide range of industrial and commercial sectors in Ireland and the United Kingdom. The property management business operates three business units—commercial, residential and retail – through which it manages mixed and single use property developments.

The Company followed the acquisition method of accounting in accordance with the accounting pronouncement related to business combinations. The following table summarizes the final fair values of the assets acquired and liabilities assumed from Veris plc.

	(in thousands)
Purchase consideration	$	74,335
Current assets	$	42,962
Current liabilities		(48,122	)
Property and equipment		1,005
Customer relationship assets		44,235
Goodwill		40,165
Other assets		956
Long-term borrowings		(77	)
Deferred income taxes and other noncurrent liabilities		(6,789	)
	$	74,335

The goodwill arising from the acquisition consists largely of the growth opportunity the Company anticipates in the core businesses acquired. None of the goodwill is expected to be deductible for tax purposes. All of the goodwill recorded is included in the Food and Support Services—International segment.

For the three and nine months ended July 1, 2011, $30.8 million and $86.5 million of sales and $1.2 million and $1.7 million of net income, respectively, were recorded in the Condensed Consolidated Statements of Operations related to the acquisition of Veris plc. For the three and nine months ended July 2, 2010, $20.3 million and $49.1 million of sales and $0.8 million and $0.5 million of net income, respectively, were recorded in the Condensed Consolidated Statements of Operations related to the acquisition of Veris plc. During the nine months ended July 2, 2010, approximately $1.8 million of pretax transaction-related costs related to the acquisition were recorded in "Selling and general corporate expenses" in the Condensed Consolidated Statement of Operations.

Unaudited Pro Forma Results of Operations

The following unaudited pro forma results of operations (in thousands) for the nine months ended July 1, 2011 and July 2, 2010 assume the acquisitions of Masterplan, ReMedPar, and MESA and Veris plc occurred at the beginning of fiscal 2010. This unaudited pro forma information does not purport to be indicative of the results that would have been obtained if the acquisitions had actually occurred at the beginning of fiscal 2010, nor of the results that may be reported in the future.

	Nine Months Ended July 1, 2011		Nine Months Ended July 2, 2010
Sales	$	9,963,114	$	9,527,596
Net income		59,455		13,799
Net income attributable to ARAMARK shareholder		59,090		13,799