2)	Acquisitions and Purchase Accounting

The company operates in a highly fragmented industry and has completed numerous acquisitions over the past several years as a component of its growth strategy. The company has acquired industry leading brands and technologies to position itself as a leader in the commercial foodservice equipment and food processing equipment industries.

The company has accounted for all business combinations using the purchase method to record a new cost basis for the assets acquired and liabilities assumed. The difference between the purchase price and the fair value of the assets acquired and liabilities assumed has been recorded as goodwill in the financial statements. The results of operations are reflected in the consolidated financial statements of the company from the date of acquisition.

PerfectFry

On July 13, 2010, the company completed its acquisition of substantially all of the assets and operations of PerfectFry Company LTD (“PerfectFry”), a leading manufacturer of ventless countertop frying units for the commercial foodservice industry for a purchase price of approximately $4.9 million.

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

	(as initially reported)			Measurement Period			(as adjusted)
	Jul 13, 2010			Adjustments			Jul 13, 2010


Cash	$	247		$	—		$	247
Current assets		1,949			(316	)		1,633
Goodwill		2,502			(296	)		2,206
Other intangibles		1,653			—			1,653
Current liabilities		(1,497	)		612			(885	)

Net assets acquired and liabilities assumed	$	4,854		$	—		$	4,854

The goodwill and $1.2 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 include $0.1 million allocated to developed technology and $0.3 million allocated to customer relationships which are to be amortized over a period of 5 years. Goodwill and other intangibles of PerfectFry are allocated to the Commercial Foodservice Equipment Group for segment reporting purposes. These assets are expected to be deductible for tax purposes.

Cozzini

On September 21, 2010, the company completed its acquisition of the food processing equipment business of Cozzini, Inc. (“Cozzini”), a leading manufacturer of equipment solutions for the food processing industry, for an aggregate purchase price of approximately $19.2 million, net of cash acquired, including $17.4 million in cash and 34,263 shares of Middleby common stock valued at $1.8 million. An additional contingent payment of $2.0 million was made in the first quarter of 2011 upon the achievement of certain sales targets. During the second quarter of 2011, the company finalized the working capital provision resulting in no additional payments.

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

	(as initially reported)			Measurement Period			(as adjusted)
	Sep 21, 2010			Adjustments			Sep 21, 2010

Cash	$	557		$	30		$	587
Current assets		13,601			172			13,773
Property, plant and equipment		863			(30	)		833
Goodwill		9,601			(1,745	)		7,856
Other intangibles		6,691			1,119			7,810
Other assets		636			72			708
Current liabilities		(11,859	)		68			(11,791	)

Consideration paid at closing	$	20,090		$	(314	)	$	19,776

Contingent consideration		2,000			—			2,000

Net assets acquired and liabilities assumed	$	22,090		$	(314	)	$	21,776

The goodwill and $3.6 million of other intangibles associated with the trade name are subject to the non-amortization provisions of ASC 350. Other intangibles also include $2.7 million allocated to customer relationships and $1.4 million allocated to backlog which are to be amortized over the periods of 4 years and 3 months respectively. Goodwill and other intangibles of Cozzini are allocated to the Food Processing Equipment Group for segment reporting purposes. These assets are expected to be deductible for tax purposes.

Beech

On April 12, 2011, the company completed its acquisition of all of the capital stock of J.W. Beech Pty. Ltd., together with its subsidiary, Beech Ovens Pty. Ltd. (collectively “Beech”), a leading manufacturer of stone hearth ovens for the commercial foodservice industry for a purchase price of approximately $13.5 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)			Measurement Period			(as adjusted)
	Apr 12, 2011			Adjustments			Apr 12, 2011

Cash	$	525		$	—		$	525
Current assets		1,145			—			1,145
Property, plant and equipment		57			—			57
Goodwill		11,433			(632	)		10,801
Other intangibles		2,317			(294	)		2,023
Deferred tax asset		—			704			704
Current liabilities		(1,100	)		—			(1,100	)
Other non-current liabilities		(893	)		222			(671	)

Net assets acquired and liabilities assumed	$	13,484		$	—		$	13,484

The goodwill and $1.9 million of other intangibles associated with the trade name are subject to the non-amortization provisions of ASC 350. Other intangibles also includes $0.1 million allocated to backlog which is to be amortized over a period of 3 months. Goodwill and other intangibles of Beech are allocated to the Commercial Foodservice 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. Such changes are not expected to be significant. The company expects to complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date.

Lincat Group

On May 27, 2011, the company completed its acquisition of Lincat Group PLC (“Lincat”), a leading manufacturer of ranges, ovens, and counterline equipment for the commercial foodservice industry for a purchase price of approximately $94.5 million.

	(as initially reported)			Measurement Period			(as adjusted)
	May 27, 2011			Adjustments			May 27, 2011

Cash	$	12,392		$	—		$	12,392
Current assets		16,992			—			16,992
Property, plant and equipment		14,368			—			14,368
Goodwill		45,765			(1,120	)		44,645
Other intangibles		31,343			(4,701	)		26,642
Current liabilities		(10,924	)		(11	)		(10.935	)
Other non-current liabilities		(15,414	)		5,832			(9,582	)

Net assets acquired and liabilities assumed	$	94,522		$	—		$	94,522

The goodwill and $13.2 million of other intangibles associated with the trade name are subject to the non-amortization provisions of ASC 350. Other intangibles also includes $13.0 million allocated to customer relationships and $0.4 million allocated to backlog, which are to be amortized over periods of 5 years and 3 months, respectively. Goodwill and other intangibles of Lincat are allocated to the Commercial Foodservice Equipment Group for segment reporting purposes. These assets are 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.

Danfotech

On July 5, 2011, the company completed its acquisition of Danfotech Inc. (“Danfotech”), a manufacturer of meat presses and defrosting equipment for the food processing industry for a purchase price of approximately $6.3 million. The purchase price is subject to adjustment based upon a working capital provision within the purchase agreements.

	Jul 5, 2011

Cash	$	165
Current assets		1,073
Property, plant and equipment		102
Goodwill		3,423
Other intangibles		1,864
Other assets		4
Current liabilities		(309	)
Other non-current liabilities		(46	)

Net assets acquired and liabilities assumed	$	6,276

The goodwill and $1.1 million of other intangibles associated with the trade name are subject to the non-amortization provisions of ASC 350. Other intangibles also includes $0.6 million allocated to customer relationships, $0.1 million allocated to developed technology and $0.1 million allocated to backlog, which are to be amortized over periods of 4 years, 3 years and 3 months, respectively. Goodwill and other intangibles of Danfotech are allocated to the Food Processing Equipment Group for segment reporting purposes. These assets are 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.

Maurer

On July 22, 2011, the company completed its acquisition of Maurer-Atmos (“Maurer”), a manufacturer of batch and continuous ovens for the food processing industry for a purchase price of approximately $3.8 million.

	Jul 22, 2011

Current assets	$	1,673
Property, plant and equipment		628
Goodwill		870
Other intangibles		922
Current liabilities		(246	)

Net assets acquired and liabilities assumed	$	3,847

The goodwill and $0.6 million of other intangibles associated with the trade name are subject to the non-amortization provisions of ASC 350. Other intangibles also includes $0.3 million allocated to customer relationships and less than $0.1 million allocated to developed technology, which are to be amortized over periods of 4 years and 3 years, respectively. Goodwill and other intangibles of Maurer 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.

Auto-Bake

On August 1, 2011, the company completed its acquisition of Auto-Bake Proprietary Limited (“Auto-Bake”), a manufacturer of automated baking ovens for the food processing industry for a purchase price of approximately $22.6 million. The purchase price is subject to adjustment based upon a working capital provision within the purchase agreements.

	Aug 1, 2011

Cash	$	110
Current assets		3,209
Property, plant and equipment		477
Goodwill		16,259
Other intangibles		6,784
Other assets		336
Current liabilities		(2,506	)
Other non-current liabilities		(2,035	)

Net assets acquired and liabilities assumed	$	22,634

The goodwill and $4.1 million of other intangibles associated with the trade name are subject to the non-amortization provisions of ASC 350. Other intangibles also includes $2.3 million allocated to customer relationships, $0.2 allocated to developed technology and $0.2 million allocated to backlog, which are to be amortized over periods of 4 years, 3 years and 3 months, respectively. Goodwill and other intangibles of Auto-Bake are allocated to the Food Processing Equipment Group for segment reporting purposes. These assets are 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.