Follett

On May 31, 2016, the company completed its acquisition of substantially all of the assets of Follett Corporation ("Follett"), a leading manufacturer of ice machines, ice and water dispensing equipment, ice storage and transport products and medical grade refrigeration products for the foodservice and healthcare industries headquartered in Easton, Pennsylvania, for a purchase price of approximately $206.9 million, net of cash acquired. During the first quarter of 2017, the company finalized the working capital provision provided for by the purchase agreement resulting in an additional payment to the seller of $0.7 million.

The final allocation of cash paid for the Follett acquisition is summarized as follows (in thousands):



	(as initially reported) May 31, 2016			Measurement Period Adjustments			(as adjusted) May 31, 2016
Cash	$	22,620		$	2,888		$	25,508
Current assets	41,602			(2,249		)	39,353
Property, plant and equipment	19,868			8,598			28,466
Goodwill	76,220			(35,656		)	40,564
Other intangibles	82,450			41,810			124,260
Other assets	1,358			170			1,528
Current liabilities	(11,779		)	(10,801		)	(22,580		)
Other non-current liabilities	(616		)	(4,064		)	(4,680		)

Net assets acquired and liabilities assumed	$	231,723		$	696		$	232,419

The goodwill and $67.8 million of other intangibles associated with the trade name are subject to the non-amortization provisions of ASC 350 "Intangibles - Goodwill and Other". Other intangibles also includes $55.2 million allocated to customer relationships and $1.3 million allocated to backlog, which are to be amortized over periods of 8 years and 3 months, respectively. Goodwill and other intangibles of Follett are allocated to the Commercial Foodservice Equipment Group for segment reporting purposes. These assets are expected to be deductible for tax purposes.

Burford

On May 1, 2017, the company completed its acquisition of all of the capital stock of Burford Corp. ("Burford"). Burford is a leading manufacturer of industrial baking equipment for the food processing industry located in Maysville, Oklahoma, for a purchase price of approximately $14.8 million, net of cash acquired. During the fourth quarter of 2017, the company finalized the working capital provision provided for by the purchase agreement resulting in a refund from the seller of $0.3 million.

The following estimated fair values of assets acquired and liabilities assumed are provisional and are based on the information that was available as of the acquisition date to estimate the fair value of assets acquired and liabilities assumed (in thousands):



	(as initially reported) May 1, 2017			Preliminary Measurement Period Adjustments			(as adjusted) May 1, 2017
Cash	$	2,514		$	—		$	2,514
Current assets	6,424			126			6,550
Property, plant and equipment	656			(13		)	643
Goodwill	7,289			808			8,097
Other intangibles	4,900			1,840			6,740
Current liabilities	(2,254		)	(961		)	(3,215		)
Long term deferred tax liability	(1,840		)	612			(1,228		)
Other non-current liabilities	—			(2,761		)	(2,761		)

Net assets acquired and liabilities assumed	$	17,689		$	(349	)	$	17,340

The long term deferred tax liability amounted to $1.2 million. The net deferred tax liability is comprised of $2.7 million of deferred tax liability related to the difference between the book and tax basis of identifiable intangible assets, net of $0.7 million related to federal and state net operating loss carryforwards and $0.8 million of deferred tax asset arising from the difference between the book and tax basis of identifiable tangible asset and liability accounts.

The goodwill and $2.7 million of other intangibles associated with the trade name are subject to the non-amortization provisions of ASC 350. Other intangibles also include $3.1 million allocated to customer relationships, $0.7 million allocated to developed technology and $0.3 million allocated to backlog, which are to be amortized over periods of 6 years, 7 years and 3 months, respectively. Goodwill and other intangibles of Burford are allocated to the Food Processing Equipment Group for segment reporting purposes. These assets are not expected to be deductible for tax purposes.

The company believes that information gathered to date provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed but the company is waiting for additional information necessary to finalize those fair values. Thus, the provisional measurements of fair value set forth above are subject to change. The company expects to complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date.

CVP Systems

On June 30, 2017, the company completed its acquisition of all of the capital stock of CVP Systems, Inc. ("CVP Systems"), a leading manufacturer of high-speed packaging systems for the meat processing industry located in Downers Grove, Illinois, for a purchase price of approximately $30.3 million, net of cash acquired. The purchase price included $17.9 million in cash and 106,254 shares of Middleby common stock valued at $12.3 million. The purchase price is subject to adjustment based upon a working capital provision provided for by the purchase agreement. The company expects to finalize this in the first quarter of 2018.



	(as initially reported) June 30, 2017			Preliminary Measurement Period Adjustments			(as adjusted) June 30, 2017
Cash	$	621		$	—		$	621
Current assets	5,973			(1,435		)	4,538
Property, plant and equipment	238			(91		)	147
Goodwill	20,297			432			20,729
Other intangibles	8,700			4,350			13,050
Current liabilities	(1,532		)	(514		)	(2,046		)
Long term deferred tax liability	(3,168		)	(633		)	(3,801		)
Other non-current liabilities	—			(2,362		)	(2,362		)

Net assets acquired and liabilities assumed	$	31,129		$	(253	)	$	30,876

The long term deferred tax liability amounted to $3.8 million. The net liability is comprised of $5.0 million of deferred tax liability related to the difference between the book and tax basis of identifiable intangible assets, net of $0.4 million related to federal and state net operating loss carryforwards and $0.8 million of deferred tax assets arising from the difference between the book and tax basis of identifiable tangible asset and liability accounts.

The goodwill and $6.2 million of other intangibles associated with the trade name are subject to the non-amortization provisions of ASC 350. Other intangibles also include $5.7 million allocated to customer relationships, $0.8 million allocated to developed technology and $0.3 million allocated to backlog, which are to be amortized over periods of 5 years, 7 years and 3 months, respectively. Goodwill and other intangibles of CVP Systems are allocated to the Food Processing Equipment Group for segment reporting purposes. These assets are not expected to be deductible for tax purposes.

Sveba Dahlen

On June 30, 2017, the company completed its acquisition of all of the capital stock of Sveba Dahlen Group ("Sveba Dahlen"), a developer and manufacturer of ovens and baking equipment for the commercial foodservice and industrial baking industries headquartered in Fristad, Sweden, for a purchase price of $81.4 million, net of cash acquired.



	(as initially reported) June 30, 2017			Preliminary Measurement Period Adjustments			(as adjusted) June 30, 2017
Cash	$	4,569		$	—		$	4,569
Current assets	22,686			(767		)	21,919
Property, plant and equipment	9,128			(332		)	8,796
Goodwill	33,785			(2,843		)	30,942
Other intangibles	34,175			7,775			41,950
Other assets	1,170			(3		)	1,167
Current portion of long-term debt	—			(14		)	(14		)
Current liabilities	(11,782		)	649			(11,133		)
Long term debt	—			(140		)	(140		)
Long term deferred tax liability	(7,751		)	(2,600		)	(10,351		)
Other non-current liabilities	(42		)	(1,725		)	(1,767		)

Net assets acquired and liabilities assumed	$	85,938		$	—		$	85,938

The long term deferred tax liability amounted to $10.4 million. The liability is comprised of $9.2 million of deferred tax liability related to the difference between the book and tax basis of identifiable intangible assets and $1.2 million of deferred tax liability related to the difference between the book and tax basis on identifiable tangible asset and liability accounts.

The goodwill and $22.2 million of other intangibles associated with the trade name are subject to the non-amortization provisions of ASC 350. Other intangibles also include $18.1 million allocated to customer relationships and $1.6 million allocated to backlog, which are to be amortized over periods of 6 years and 3 months, respectively. Goodwill and other intangibles of Sveba Dahlen are allocated to the Commercial Foodservice Equipment Group for segment reporting purposes. These assets are not expected to be deductible for tax purposes.

QualServ

On August 31, 2017, the company completed its acquisition of substantially all of the assets of QualServ Solutions LLC ("QualServ"), a global commercial kitchen design, manufacturing, engineering, project management and equipment solutions provider located in Fort Smith, Arkansas, for a purchase price of $40.2 million, net of cash acquired. The purchase price is subject to adjustment based upon a working capital provision provided by the purchase agreement. The company expects to finalize this in the first quarter of 2018.



	(as initially reported) August 31, 2017			Preliminary Measurement Period Adjustments			(as adjusted) August 31, 2017
Cash	$	1,130		$	—		$	1,130
Current assets	18,031			(64		)	17,967
Property, plant and equipment	4,785			—			4,785
Goodwill	14,590			195			14,785
Other intangibles	9,600			—			9,600
Current liabilities	(6,810		)	(131		)	(6,941		)

Net assets acquired and liabilities assumed	$	41,326		$	—		$	41,326

The goodwill and $6.2 million of other intangibles associated with the trade name are subject to the non-amortization provisions of ASC 350. Other intangibles also include $3.3 million allocated to customer relationships and $0.1 million allocated to backlog, which are to be amortized over periods of 6 years and 3 months, respectively. Goodwill and other intangibles of QualServ are allocated to the Commercial Foodservice Equipment Group for segment reporting purposes. These assets are expected to be deductible for tax purposes.

Globe

On October 17, 2017, the company completed its acquisition of all of the capital stock of Globe Food Equipment Company ("Globe"), a leading brand in slicers and mixers for the commercial foodservice industry located in Dayton, Ohio, for a purchase price of $104.6 million, net of cash acquired. The purchase price is subject to adjustment based upon a working capital provision provided by the purchase agreement. The company expects to finalize this in the first quarter of 2018.



	(as initially reported) October 17, 2017
Cash	$	3,420
Current assets	17,197
Property, plant and equipment	1,120
Goodwill	67,176
Other intangibles	43,444
Current liabilities	(5,994		)
Long term deferred tax liability	(16,456		)
Other non-current liabilities	(1,907		)

Net assets acquired and liabilities assumed	$	108,000

The long term deferred tax liability amounted to $16.5 million. The net liability is comprised of $16.3 million of deferred tax liability related to the difference between the book and tax basis of identifiable intangible assets and $0.2 million of deferred tax liability related to the difference between the book and tax basis on identifiable tangible asset and liability accounts.

The goodwill and $28.2 million of other intangibles associated with the trade name are subject to the non-amortization provisions of ASC 350. Other intangibles also include $14.9 million allocated to customer relationships and $0.3 million allocated to backlog, which are to be amortized over periods of 5 years and 3 months, respectively. Goodwill and other intangibles of Globe are allocated to the Commercial Foodservice Equipment Group for segment reporting purposes. These assets are not expected to be deductible for tax purposes.

Scanico

On December 7, 2017, the company completed its acquisition of all of the capital stock of Scanico A/S ("Scanico"), a leading manufacturer of industrial cooling and freezing equipment for the food processing industry located in Aalborg, Denmark, for a purchase price of $34.9 million, net of cash acquired. The purchase price is subject to adjustment based upon a working capital provision provided for by the purchase agreement. The company expects to finalize this in the first quarter of 2018. An additional payment is also due upon the achievement of certain financial targets.



	(as initially reported) December 7, 2017
Cash	$	6,766
Current assets	3,428
Property, plant and equipment	447
Goodwill	30,072
Other intangibles	11,491
Current liabilities	(7,236		)
Long term deferred tax liability	(3,305		)

Consideration paid at closing	$	41,663

Contingent consideration	(751		)

Net assets acquired and liabilities assumed	$	40,912

The long term deferred tax liability amounted to $3.3 million. The net liability is comprised of $2.5 million of deferred tax liability related to the difference between the book and tax basis of identifiable intangible assets and $0.8 million of deferred tax liability related to the difference between the book and tax basis on identifiable tangible asset and liability accounts.

The goodwill and $6.6 million of other intangibles associated with the trade name are subject to the non-amortization provisions of ASC 350. Other intangibles also include $2.0 million allocated to customer relationships, $0.9 million allocated to developed technology and $2.0 million allocated to backlog, which are to be amortized over periods of 5 years, 5 years and 3 months, respectively. Goodwill and other intangibles of Scanico are allocated to the Food Processing Equipment Group for segment reporting purposes. These assets are not expected to be deductible for tax purposes.

The Scanico purchase agreement includes an earnout provision providing for a contingent payment due to the sellers to the extent certain financial targets are exceeded. This earnout is payable during the third quarter of 2018, if Scanico exceeds certain sales and earnings targets for the twelve months ended June 30, 2018. The contractual obligation associated with this contingent earnout provision recognized on the acquisition date is $0.8 million.

Pro forma financial information

In accordance with ASC 805 “Business Combinations”, the following unaudited pro forma results of operations for the years ended December 30, 2017 and December 31, 2016, assumes the 2016 acquisition of Follett and the 2017 acquisitions of Burford, CVP Systems, Sveba Dahlen, QualServ, L2F, Globe and Scanico were completed on January 3, 2016 (first day of fiscal 2016). The following pro forma results include adjustments to reflect additional interest expense to fund the acquisition, amortization of intangibles associated with the acquisition, and the effects of adjustments made to the carrying value of certain assets (in thousands, except per share data):