Business Acquisitions

12 Months Ended

Dec. 31, 2016

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

Note 20 – Business Acquisitions

In November 2016, the Company acquired Lubricor, Inc. and its affiliated entities (“Lubricor”), a metalworking fluids manufacturer headquartered in Waterloo, Ontariofor its North America reportable operating segment for 15.9 million CAD, or approximately $11.9 million, which includes an immaterial post-closing adjustment to be received by the Company in the first quarter of 2017. Lubricor’s technology provides the Company with additional offerings in synthetic coolants, hydroforming, and stamping products, and, also, it brings the Company its strong customer relationships, particularly in the North America automotive market. The Company allocated approximately $6.1 million of the purchase price to intangible assets, comprised of trademarks and formulations, to be amortized over 15 years; a non-compete agreement, to be amortized over 5 years; and customer relationships, to be amortized over 15 years. In addition, the Company recorded approximately $3.2 million of goodwill, related to expected value not allocated to other acquired assets, none of which will be tax deductible.

In May 2016, the Company acquired a business that is associated with dust control products for the mining industry for its North America reportable operating segment for $1.9 million. The acquisition provides a strategic opportunity to expand Quaker’s technology and product portfolio offering in the mining industry. The Company allocated $1.7 million of the purchase price to intangible assets, comprised of trademarks and formulations, to be amortized over 15 years; a non-compete agreement, to be amortized over 5 years; and customer relationships, to be amortized over 15 years. In addition, the Company recorded $0.1 million of goodwill, related to expected value not allocated to other acquired assets, all of which will be tax deductible.

As of December 31, 2016, the allocation of the purchase price for the 2016 acquisitions have not been finalized and the one-year measurement period for each acquisition has not ended. 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 in all of the Company’s acquisitions in 2016:

2016 Acquisitions
Current assets (includes cash acquired)		$	3,443
Property, plant and equipment			2,574
Intangibles
	Customer lists and rights to sell		5,041
	Trademarks, formulations and
	product technology		2,543
	Other intangibles		127
Goodwill			3,311
	Total assets purchased		17,039
Current liabilities			(1,198)
Other long-term liabilities			(2,019)
	Total liabilities assumed		(3,217)
	Gross cash paid for acquisition	$	13,822
	Less: cash acquired		105
	Net cash paid for acquisition	$	13,717

In July 2015, the Company acquired Verkol, a leading specialty grease and other lubricants manufacturer based in northern Spain, included in its EMEA reportable operating segment, for 37.7 million EUR, or approximately $41.4 million. This includes a post-closing adjustment of 1.3 million EUR, or approximately $1.4 million that was accrued as of December 31, 2015 and paid during the first quarter of 2016. The purchase included cash acquired of 14.1 million EUR, or approximately $15.4 million, and assumed long-term debt of 2.2 million EUR, or approximately $2.4 million.

During the first six months of 2016, the Company identified and recorded certain adjustments to the allocation of the purchase price for the Verkol acquisition. These adjustments were the result of the Company assessing additional information related to assets acquired during the one-year measurement period following the acquisition. As of June 30, 2016, the allocation of the purchase price for the Verkol acquisition was finalized. The following table presents the final allocation of the purchase price of the assets acquired and liabilities assumed for the Verkol acquisition:

Verkol Acquisition
Current assets (includes cash acquired)		$	31,151
Property, plant and equipment			7,941
Intangibles
	Customer lists and rights to sell		6,146
	Trademarks, formulations and
	product technology		5,378
	Other intangibles		219
Goodwill			5,051
Other long-term assets			158
	Total assets purchased		56,044
Current liabilities			(6,720)
Long-term debt			(2,400)
Other long-term liabilities			(5,531)
	Total liabilities assumed		(14,651)
	Gross cash paid for acquisition	$	41,393
	Less: cash acquired		15,423
	Net cash paid for acquisition	$	25,970

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 2.9 million AUD, or approximately $2.4 million. The Company also assumed an additional 0.3 million AUD, or approximately $0.2 million hold-back of consideration, which was paid out and settled during the fourth quarter of 2015.

In November 2014, the Company acquired Binol AB, a leading bio-lubricants producer primarily serving the Nordic region, included in it EMEA reportable operating segment, for 136.5 million SEK, or approximately $18.5 million, which is net of 4.4 million SEK, or approximately $0.5 million, received by the Company as part of a post-closing adjustment in the first quarter of 2015.

In August 2014, the Company acquired ECLI Products, LLC (“ECLI”), a specialty grease manufacturer for its North American reportable operating segment for approximately $53.1 million, including certain post-closing adjustments.

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 December 31, 2015, the allocations of the purchase price for all of the Company’s 2014 acquisitions werefinalized. The following table presents the final 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 (includes cash acquired)		$	12,413
Property, plant and equipment			4,158
Intangibles
	Customer lists and rights to sell		30,924
	Trademarks, formulations and
	product technology		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)
	Gross cash paid for acquisition	$	74,036
	Less: cash acquired		1,037
	Net cash paid for acquisition	$	72,999

Additionally, in June 2014, the Company acquired the remaining 49% ownership interest in its Australian affiliate, Quaker Chemical (Australasia) Pty. Limited ("QCA") for 8.0 million AUD, or approximately $7.6 million, from its joint venture partner, Nuplex Industries. QCA is a part of the Company’s Asia/Pacific reportable operating segment. As this acquisition was a change in an existing controlling ownership, the Company recorded $6.5 million of excess purchase price over the carrying value of the noncontrolling interest in Capital in excess of par value.

In December 2010, the Company acquired Summit Lubricants, Inc., which manufactures and distributes specialty greases and lubricants, for approximately $29.8 million, including certain post-closing adjustments finalized in 2011. Liabilities assumed included an earnout to be paid to the former shareholders if certain earnings targets were met by the end of 2013, which was settled and paid during the second quarter of 2014 with a payment to the former shareholder of approximately $4.7 million.

The results of operations of the acquired businesses and assets are included in the Consolidated Statements of Income from their respective acquisition dates. Transaction expenses associated with these acquisitions are included in SG&A in the Company’s 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.