Acquisition

3 Months Ended

May 04, 2013

Acquisition

16. Acquisition

On October 29, 2012, Signet acquired the outstanding shares of Ultra Stores, Inc., a leading jewelry retailer operating primarily in outlet centers, from Crystal Financial LLC and its other stockholders (the “Ultra Acquisition”). As a result of the acquisition, Signet immediately increased its share of the US outlet channel for jewelry. The Company initially paid $56.7 million, net of acquired cash of $1.5 million, for the Ultra Acquisition including a $1.4 million working capital adjustment at closing, subject to post-closing procedures. The total consideration paid was funded through existing cash.

On May 15, 2013, the post-closing procedures were finalized and a reduction to the initial purchase price was agreed to. As a result, total consideration paid for the Ultra Acquisition was reduced to $55.3 million. The refund of $1.4 million from the initial consideration paid was recorded within other receivables as of May 4, 2013.

The results of operations related to the Ultra Acquisition are reported as a component of the results of the US division and included in Signet’s consolidated financial statements commencing on the date of acquisition.

The Ultra Acquisition was accounted for as a business combination during the fourth quarter of Fiscal 2013. During the first quarter of Fiscal 2014, the Company finalized the valuation of net assets acquired. There were no material changes to the valuation of net assets acquired from the initial allocation reported during the fourth quarter of Fiscal 2013. Accordingly, the total consideration paid has been allocated to the net assets acquired based on the final fair values at October 29, 2012 as follows:

(in millions)	Initial Allocation			Final Allocation			Change
Recognized amounts of assets acquired and liabilities assumed:
Inventories	$	43.3		$	43.3		$	—
Other current assets, excluding cash acquired		3.3			3.3			—
Property and equipment		12.1			12.1			—
Other assets		0.3			0.3			—
Current liabilities		(19.5	)		(19.5	)		—
Other liabilities		(7.4	)		(7.4	)		—
Fair value of net assets acquired	$	32.1		$	32.1		$	—
Goodwill(1)		24.6			23.2			(1.4	)
Total consideration	$	56.7		$	55.3		$	(1.4	)

(1) None of the goodwill will be deductible for income tax purposes. The goodwill balance is recorded within other assets in the consolidated balance sheet.