Business Acquisitions

9 Months Ended

Sep. 30, 2015

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

Note 12 – Business Acquisitions

In July 2015, the Company acquired Verkol, S.A. (“Verkol”), a leading specialty grease and other lubricants manufacturer based in Northern Spain for its EMEA reportable operating segment for approximately 36,455 EUR, or approximately $40,009, including cash acquired of approximately 14,115 EUR, or approximately $15,491, and assumed long-term debt of approximately 2,187 EUR, or approximately $2,400. In addition, the Company incurred approximately $2,813, or $0.15 per diluted share, of one-time transaction expenses in the third quarter of 2015, related to this acquisition. Verkol is a market leader with world-class grease manufacturing capabilities and state-of-the-art research and development facilities, selling products into industrial end markets with a particular strength serving the steel industry. Also, Verkol brings a unique technology in continuous casting products that will provide the Company with cross-selling opportunities to its global steel customer base. The Company allocated the purchase price to $11,743 of intangible assets, comprised of trademarks and formulations, to be amortized over 15 years; a non-compete agreement, to be amortized over 4 years; and customer relationships, to be amortized over 15 years. In addition, the Company has recorded $3,861 of goodwill, related to expected value outside its other acquired assets, none of which will be tax deductible.

As of September 30, 2015, the allocation of the purchase price for the Verkol acquisition has not been finalized and the one-year measurement period has not ended. Further adjustments may be necessary as a result of the Company’s assessment of additional information related to the fair value of assets acquired and liabilities assumed. The following table presents the current allocation of the purchase price of the assets acquired and liabilities assumed:

Verkol Acquisition
Current assets		$	30,907
Property, plant & equipment			7,873
Intangibles
	Customer lists and rights to sell		6,146
	Trademarks and patents		5,378
	Other intangibles		219
Goodwill			3,861
Other long-term assets			146
	Total assets purchased		54,530
Current liabilities			(7,349)
Long-term debt			(2,400)
Other long-term liabilities			(4,772)
	Total liabilities assumed		(14,521)
Cash paid for acquisitions		$	40,009

In December 2014, the Company acquired a business that is principally concerned with safety fluid applications for mining sites in its Asia/Pacific reportable operating segment for net consideration of approximately 2,850 Australian Dollars, or approximately $2,355. The Company also assumed an additional 300 Australian Dollars, or approximately $248, hold-back of consideration. This acquisition provides a strategic opportunity for Quaker in the core Australian mining market. The Company allocated the purchase price to $1,802 of intangible assets, comprised of trademarks and formulations, to be amortized over 15 years; a non-competition agreement, to be amortized over 5 years; and customer relationships, to be amortized over 15 years. In addition, the Company has recorded $1,178 of goodwill, related to expected value outside its other acquired assets, none of which will be tax deductible.

In November 2014, the Company acquired Binol AB (“Binol”), a leading bio-lubricants producer primarily serving the Nordic region for its EMEA reportable operating segment for approximately 136,500 SEK, or approximately $18,536, which is net of 4,400 SEK, or approximately $528, received by the Company as part of a post-closing adjustment in the first quarter of 2015. The post-closing adjustment recorded in the first quarter of 2015 adjusted the acquisition’s goodwill. This acquisition provides a strategic opportunity for Quaker to leverage Binol's environmentally friendly technology and customer-aligned products, including neat oil technology for metalworking applications and biodegradable hydraulic oils, across the Company’s global footprint. The Company allocated the purchase price to $11,805 of intangible assets, comprised of trademarks and formulations, to be amortized over 15 years; a non-competition agreement, to be amortized over 5 years; and customer relationships, to be amortized over 14 years. In addition, the Company has recorded $5,726 of goodwill, net of the $528 post-closing adjustment mentioned above, related to expected value outside its other acquired assets, none of which will be tax deductible.

In August 2014, the Company acquired ECLI Products, LLC (“ECLI”), a specialty grease manufacturer for its North American reportable operating segment for approximately $53,145, including certain post-closing adjustments. ECLI specializes in greases for OEM first-fill customers across several industry sectors, including automotive, industrial, aerospace/military, electronics, office automation and natural resources. This acquisition complements Quaker’s entry into the specialty grease market that began in 2010, and, also, provides an opportunity to leverage Quaker's global footprint with its current market expertise. The Company allocated the purchase price to $31,050 of intangible assets, comprised of trademarks and formulations, to be amortized over 10 years; customer relationships, to be amortized over 15 years; and a non-compete agreement, to be amortized over 5 years. In addition, the Company has recorded $14,642 of goodwill, related to expected value outside its other acquired assets, all of which will be tax deductible.

During 2015, the Company identified and recorded certain adjustments to the allocations of the purchase price for certain 2014 acquisitions. These adjustments were the result of the Company assessing additional information related to assets acquired and liabilities assumed during the one-year measurement period following each acquisition. As of September 30, 2015, the allocations of the purchase price for all of the Company’s 2014 acquisitions, except ECLI, have not been finalized and the one-year measurement period for all of the acquisitions has not ended. Further adjustments to the open acquisitions for 2014 may be necessary as a result of the Company’s assessment of additional information related to the fair values of assets acquired and liabilities assumed. The following table presents the current allocation of the purchase price of the assets acquired and liabilities assumed in all of the Company’s acquisitions in 2014:

2014 Acquisitions
Current assets		$	12,413
Property, plant & equipment			4,158
Intangibles
	Customer lists and rights to sell		30,924
	Trademarks and patents		12,606
	Other intangibles		1,127
Goodwill			21,546
Other long-term assets			198
	Total assets purchased		82,972
Current liabilities			(4,562)
Long-term liabilities			(4,374)
	Total liabilities assumed		(8,936)
Cash paid for acquisitions		$	74,036

Included in the 2014 acquisitions was approximately $1,037 of cash acquired.

Additionally, in June 2014, the Company acquired the remaining 49% ownership interest in its Australian affiliate, Quaker Chemical (Australasia) Pty. Limited ("QCA") for 8,000 Australian Dollars, or approximately $7,577, from its joint venture partner, Nuplex Industries. QCA is a part of the Company’s Asia/Pacific reportable operating segment. This acquisition further strengthens Quaker’s position in Australia, and allows the Company to simplify its overall corporate structure and improve its organizational efficiencies. As this acquisition was a change in an existing controlling ownership, the Company recorded $6,450 of excess purchase price over the carrying value of the noncontrolling interest in Additional Paid in Capital.

The results of operations of the acquired businesses and assets are included in the Condensed Consolidated Statements of Income from their respective acquisition dates. Transaction expenses associated with these acquisitions are included in SG&A in the Company’s Condensed Consolidated Statements of Income. Certain pro forma and other information is not presented, as the operations of the acquired businesses are not material to the overall operations of the Company for the periods presented.