NOTE 5 — ACQUISITION, INTEGRATION AND RESTRUCTURING EXPENSES

Acquisition, integration and restructuring expenses are comprised of costs related to the fiscal 2018 acquisition of TS as well as restructuring costs related to the Global Business Optimization Program which was initiated in fiscal 2019.

Acquisition of TS

Acquisition, integration and restructuring expenses related to the acquisition of TS are primarily comprised of restructuring costs, IT related costs, professional services, transaction related costs and other (income) costs. Restructuring costs are comprised of severance and facility exit costs. IT related costs consist primarily of data center and non-ERP application migration and integration costs, as well as, IT related professional services. Professional services are primarily comprised of integration related activities, including professional fees for project management, accounting, tax and other consulting services. Transaction related costs primarily consist of investment banking fees, legal expenses and due diligence costs incurred in connection with the completion of the transaction. Other (income) costs includes the gain recorded related to the settlement agreement with Avnet (see Note 4 – Acquisitions for further discussion), as well as payroll related costs including retention, stock compensation, relocation and travel expenses, incurred as part of the integration of TS.

Acquisition, integration and restructuring expenses for the three and six months ended July 31, 2018 and 2017 related to the acquisition of TS are comprised of the following:



	Three months ended July 31,					Six months ended July 31,
	2018			2017		2018			2017
(in thousands)
Restructuring costs	$	3,777		$	6,982	$	14,649		$	17,327
IT related costs	1,156			4,586		8,486			6,356
Professional services	839			10,932		4,406			21,069
Transaction related costs	315			2,050		1,193			17,229
Other (income) costs	(5,525		)	5,567		(555		)	10,202
Total	$	562		$	30,117	$	28,179		$	72,183

During the three months ended July 31, 2018 and 2017, the Company recorded restructuring costs in the Americas of $0.1 million and $0.9 million, respectively, and in Europe of $3.7 million and $6.1 million, respectively. During the six months ended July 31, 2018 and 2017, the Company recorded restructuring costs in the Americas of $3.5 million and $10.4 million, respectively, and in Europe of $11.1 million and $6.9 million, respectively. The accrued restructuring charges are included in “accrued expenses and other liabilities” in the Consolidated Balance Sheet.

Restructuring activity during the six months ended July 31, 2018 related to the acquisition of TS is as follows:



	Six months ended July 31, 2018
	Severance			Facility Exit Costs			Total
(in thousands)
Balance at January 31, 2018	$	13,366		$	1,630		$	14,996
Fiscal 2019 restructuring expenses	11,718			2,931			14,649
Cash payments	(11,437		)	(1,833		)	(13,270		)
Foreign currency translation	(631		)	(136		)	(767		)
Balance at July 31, 2018	$	13,016		$	2,592		$	15,608

Global Business Optimization Program

On August 29, 2018, the Company's Board of Directors approved the Global Business Optimization Program (the "GBO Program") to increase investment in the Company’s strategic priorities and implement operational initiatives to drive productivity and enhance profitability. Under the GBO Program, the Company expects to incur cash charges of approximately $70 million to $80 million, primarily comprised of $40 million to $45 million of charges in Europe and $30 million to $35 million of charges in the Americas. The majority of these charges will be incurred prior to the end of fiscal 2020. The cash charges primarily consist of severance costs, and also include professional services and other costs.

Restructuring expenses for the three and six months ended July 31, 2018 and 2017 related to the GBO Program are comprised of the following:



	Three months ended July 31,		Six months ended July 31,
	2018		2018
(in thousands)
Severance costs	$	5,605	$	8,874
Professional services	7,130		9,469
Total	$	12,735	$	18,343

During the three months ended July 31, 2018, the Company recorded restructuring costs related to the GBO Program of $6.5 million in the Americas, $6.1 million in Europe and $0.1 million in Asia-Pacific. During the six months ended July 31, 2018, the Company recorded restructuring costs of $7.3 million in the Americas, $10.9 million in Europe and $0.1 million in Asia-Pacific. The accrued restructuring charges are included in “accrued expenses and other liabilities” in the Consolidated Balance Sheet.

Restructuring activity during the six months ended July 31, 2018 related to the GBO Program is as follows:



	Six months ended July 31, 2018
	Severance			Professional Services			Total
(in thousands)
Fiscal 2019 restructuring expenses	$	8,874		$	9,469		$	18,343
Cash payments	(1,407		)	(1,598		)	(3,005		)
Foreign currency translation	(322		)	(85		)	(407		)
Balance at July 31, 2018	$	7,145		$	7,786		$	14,931