Acquisitions

On May 1, 2012, the Company completed the Merger of the Mead C&OP Business with a wholly-owned subsidiary of the Company. The Mead C&OP Business is a leading manufacturer and marketer of school supplies, office products, and planning and organizing tools - including the Mead^®, Five Star^®, Trapper Keeper^®, AT-A-GLANCE^®, Cambridge^®, Day Runner^®, Hilroy, Tilibra and Grafons brands in the U.S., Canada and Brazil.

In the Merger, MeadWestvaco Corporation (“MWV”) shareholders received 57.1 million shares of the Company's common stock, or 50.5% of the combined company, valued at $602.3 million on the date of the Merger. After the transaction was completed the Company had 113.1 million common shares outstanding.

Under the terms of the Merger agreement, MWV established a new subsidiary (“Monaco SpinCo Inc.”) to which it conveyed the Mead C&OP Business in return for a $460.0 million payment. The shares of Monaco SpinCo Inc. were then distributed to MWV's shareholders as a dividend. Immediately after the spin-off and distribution, a newly formed subsidiary of the Company merged with and into Monaco SpinCo Inc. and MWV shareholders effectively received in the stock dividend and subsequent conversion approximately one share of ACCO Brands common stock for every three shares of MWV they held. Fractional shares were paid in cash. The subsidiary company subsequently merged with Mead Products LLC (“Mead Products”), the surviving corporate entity, which is a wholly-owned subsidiary of ACCO Brands Corporation.

For accounting purposes, the Company is the acquiring enterprise. The Merger is accounted for as a purchase business combination. Accordingly, the results of the Mead C&OP Business are included in the Company's consolidated financial statements from the date of the Merger, May 1, 2012.

The preliminary purchase price, net of working capital adjustments and cash acquired, was $998.1 million. The consideration given included 57.1 million shares of ACCO Brands common stock, which were issued to MWV shareholders with a fair value of $602.3 million and a $460.0 million dividend paid to MWV. The preliminary calculation of consideration given for the Mead C&OP Business is described in the following table.



(in millions, except per share price)	At May 1, 2012
Calculated consideration for the Mead C&OP Business:
Outstanding shares of ACCO Brands common stock (1)	56.0
Multiplier needed to calculate shares to be issued (2)	1.0202020202
Number of shares issued to MWV shareholders	57.1
Closing price per share of ACCO Brands common stock (3)	$	10.55
Value of common shares issued	$	602.3
Plus:
Dividend paid to MWV	460.0
Less:
Working capital adjustment (preliminary) (4)	(32.2		)
Consideration for the Mead C&OP Business	$	1,030.1

(1) Represents the number of shares of the Company's common stock as of May 1, 2012.

(2) Represents MWV shareholders' negotiated ownership percentage in ACCO Brands of 50.5% divided by the 49.5% that was owned by ACCO Brands shareholders upon completion of the Merger.

(3) Represents the closing price per share of the Company's stock as of April 30, 2012.

(4) Represents the difference between the target net working capital and the preliminary closing net working capital as of April 30, 2012. The amount is preliminary and is expected to be finalized during the third quarter of 2012.

The following table presents the preliminary allocation of the purchase price to the fair values of the assets acquired and liabilities assumed at the date of acquisition.



(in millions of dollars)	At May 1, 2012
Calculation of Goodwill:
Consideration given for the Mead C&OP Business	$	1,030.1
Cash acquired	(32.0		)
Net purchase price	$	998.1
Plus fair value of liabilities assumed:
Accounts payable and accrued liabilities	104.5
Current and non-current deferred tax liabilities	210.8
Other non-current liabilities	29.1
Fair value of liabilities assumed	$	344.4

Less fair value of assets acquired:
Accounts receivable	73.4
Inventory	143.9
Property, plant and equipment	136.8
Identifiable intangibles	545.8
Other assets	26.1
Fair value of assets acquired	$	926.0

Goodwill	$	416.5

We are continuing our review of our fair value estimate of assets acquired and liabilities assumed during the measurement

period, which will conclude as soon as we receive the information we are seeking about facts and circumstances that existed as of the acquisition date, or learn that more information is not available. This measurement period will not exceed one year from the acquisition date. The excess of the purchase price over the fair value of net assets acquired is allocated to goodwill. The final determination of the purchase price, fair values and resulting goodwill may differ significantly from what is reflected in these condensed consolidated financial statements.

Our fair value estimate of assets acquired and liabilities assumed is pending completion of several elements, including the

finalization of an independent appraisal and valuations of the fair value of the assets acquired and liabilities assumed and final review by our management. The primary areas that are not yet finalized relate to the fair value of inventories, property and equipment, intangible assets, contingent liabilities and income and non-income related taxes. Accordingly, there could be material adjustments to our consolidated financial statements, including changes in our depreciation and amortization expense related to the valuation of property and equipment and intangible assets acquired and their respective useful lives among other adjustments.

Acquisition-related costs of $13.1 million that were incurred during the six months ended June 30, 2012, and $5.6 million that were expensed during 2011 were classified as Selling, General and Administrative expenses.

Had the acquisition occurred on January 1, 2011, unaudited pro forma consolidated results for the three and six month periods ending June 30, 2012 and 2011 would have been as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
(in millions of dollar, except per share data)	2012		2011		2012		2011
Net sales	$	466.9	$	512.9	$	864.1	$	928.1
Income from continuing operations	35.4		18.6		18.0		37.5
Income from continuing operations per common share (diluted)	$	0.31	$	0.16	$	0.16	$	0.33

The pro forma amounts above are not necessarily indicative of the results that would have occurred if the acquisition had been completed on January 1, 2011. The pro forma amounts are based on the historical results of operations, and are adjusted for depreciation and amortization of finite-lived intangibles and property, plant and equipment, and other charges related to acquisition accounting. The pro forma results of operations for the six months ended June 30, 2011 have also been adjusted to include certain transaction and financing related costs in the first year of combined reporting. These 2011 adjustments include: amortization of the purchase accounting step-up in inventory cost of $13.4 million, $18.7 million of transaction costs related to the Merger, $88.6 million in expenses related to the Company's refinancing completed on May 1, 2012. Also included is $101.9 million for the release of the U.S. tax valuation allowance as if the Company began providing a tax benefit on U.S. losses beginning January 1, 2011.