Acquisitions of and Investments in Businesses and Technologies

9 Months Ended

Oct. 31, 2015

Business Combinations [Abstract]

Acquisitions of and Investments in Businesses and Technologies

ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES AND TECHNOLOGIES

Integra

Related to the fourth quarter fiscal 2015 acquisition of Integra Plastics, Inc. (Integra), the Company received $351 in settlement of the working capital adjustment to the purchase price and finalized deferred tax calculations in fiscal 2016 first quarter. These transactions resulted in an adjustment of about $20 to the purchase price allocation. As of as October 31, 2015, the purchase price valuation was $48,262 with fair value of goodwill of $27,422. None of this goodwill is tax deductible.

Acquisition-related Contingent Consideration

The Company has contingent liabilities related to prior year acquisitions of SBG Innovatie BV and its affiliate, Navtronics BVBA (collectively, SBG) in May 2014 and Vista in January 2012 . The fair value of such contingent consideration is estimated using forecasted discounted cash flows. Projecting discounted future cash flows requires the Company to make significant estimates and assumptions regarding future revenues under the subject contingent agreement and the appropriate discount rate. Such valuations techniques include one or more significant inputs that are not observable (Level 3 fair value measures).

In connection with the acquisition of SBG, Raven is committed to making additional earn-out payments, not to exceed $2,500, calculated and paid quarterly for ten years after the purchase date contingent upon achieving certain revenues. At October 31, 2015, the fair value of this contingent consideration was $1,338, of which $329 was classified as "Accrued liabilities" and $1,009 was classified as "Other liabilities" in the Consolidated Balance Sheets. At October 31, 2014, the fair value of this contingent consideration was $1,583, of which $298 was classified as "Accrued liabilities" and $1,285 as "Other liabilities." The Company paid $38 and $188 in earn-out payments in the three- and nine-month periods ended October 31, 2015. There were $37 earn-out payments in the three- and nine-month periods ended October 31, 2014.

Related to the acquisition of Vista in 2012, the Company is committed to making annual payments based upon earn-out percentages on specific revenue streams for seven years after the purchase date, not to exceed $15,000.

As a result of the triggering event described in Note 3 Summary of Significant Accounting Policies, the Company performed a Step 1 and Step 2 impairment analysis for the Vista reporting unit. The result of the Step 2 analysis is more fully described in Note 7 Goodwill and Long-lived Asset Impairment Loss and Other Charges.The Company evaluated the fair value of the remaining assets and liabilities including acquisition related contingent consideration. This analysis included reduction of $2,273 in the fair value of this contingent consideration which was recognized in "Cost of sales" in the Consolidated Statements of Income and Comprehensive Income for the three- and nine-month periods ended October 31, 2015. At October 31, 2015 the fair value of this contingent consideration was $550, of which $76 was classified in "Accrued liabilities" and $474 as "Other liabilities" in the Consolidated Balance Sheets. At October 31, 2014 the fair value of this contingent consideration was $2,841, of which $539 was classified as "Accrued liabilities" and $2,302 as "Other liabilities" in the Consolidated Balance Sheets. The Company paid $585 and $454 in the nine-month periods ended October 31, 2015 and 2014, respectively. The Company made no earn-out payments in the three-month periods ended October 31, 2015 or 2014, respectively.