BUSINESS COMBINATIONS

12 Months Ended

Dec. 31, 2012

BUSINESS COMBINATIONS

2.     BUSINESS COMBINATIONS

During 2012, the Company completed two acquisitions for a net aggregate purchase price of approximately $649.7 (“2012 Acquisitions”). During 2011, the Company completed four insignificant acquisitions to bolster key technologies for an aggregate purchase price of approximately $60.4 (“2011 Acquisitions”). During 2011, the Company also sold two insignificant businesses for $19.2 which resulted in a $0.1 gain. During 2010, the Company completed two acquisitions for a net aggregate purchase price of approximately $469 (“2010 Acquisitions”). Each acquisition and disposition was a cash transaction.

The 2012, 2011 and 2010 Acquisitions were accounted for as purchases under FASB ASC 805, Business Combinations (“ASC 805”). The assets purchased and liabilities assumed for the 2012, 2011 and 2010 Acquisitions have been reflected in the accompanying consolidated balance sheet as of December 31, 2012 and the results of operations for the 2012, 2011 and 2010 Acquisitions and the 2011 dispositions are included in (or excluded from) the accompanying consolidated statement of earnings from the respective dates of acquisition (or disposition).

On January 30, 2012, the Company acquired 100% of the outstanding stock of UFC Aerospace Corp. (“UFC”), a provider of complex supply chain management and inventory logistics solutions, for a net purchase price of approximately $404.7.

On July 26, 2012, the Company acquired 100% of Interturbine Aviation Logistics GmbH, Interturbine Logistics Solutions GmbH and Interturbine Technologies GmbH (collectively “Interturbine”), a provider of material management logistical services to global airlines and maintenance, repair and overhaul (“MRO”) providers, for a net purchase price of approximately $245.0. Interturbine’s product range includes chemicals, lubricants, hydraulic fluids, adhesives, coatings and composites. Interturbine also supplies fasteners, cables and wires, electronic components, electrical and electromechanical materials, tools, hot bonding equipment and ground equipment to its primary customer base of airlines and MRO providers globally.

The Company completed its evaluation and allocation of the purchase price for the UFC acquisition during the period ended December 31, 2012, which resulted in an adjustment to the allocation of the UFC purchase price to increase intangible assets and to increase accrued liabilities by approximately $30.5 related to certain customer contracts which were priced below market and a portion of which were generating losses. These contracts have durations of up to four years. To the extent the profitability of these contracts improves either through contract renegotiations, cost decreases or price increases, such adjustments will be reflected when realized, and to the extent that the profitability on these contracts is not improved, the accrual will be amortized until the termination of the contracts.

The Company has not yet completed the evaluation and allocation of the purchase price for the Interturbine acquisition as management’s assessment of the valuation of certain assets and liabilities is not yet complete. The Company does not believe that the final allocation of the purchase price of the Interturbine acquisition will materially modify the current purchase price allocation.

The following table summarizes the current estimates of fair values of assets acquired and liabilities assumed in the UFC and Interturbine acquisitions in accordance with ASC 805, which are currently recorded based on management’s estimates as follows:

Accounts receivable-trade	$	44.1
Inventories		95.6
Other current and non-current assets		21.1
Property and equipment		4.4
Goodwill		455.4
Identified intangibles		117.1
Accounts payable		(20.4	)
Other current and non-current liabilities		(67.6	)
Total purchase price	$	649.7

The majority of the goodwill and other intangible assets related to the UFC acquisition is expected to be deductible for tax purposes. None of the goodwill and other intangible assets related to the Interturbine acquisition is expected to be deductible for tax purposes.

Consolidated unaudited pro forma revenues, net earnings and diluted net earnings per share giving effect to the UFC and Interturbine acquisitions as if they had occurred on January 1, 2011 were $3,172.4, $241.0, and $2.34, and $2,786.2, $245.4 and $2.41, for the years ended December 31, 2012 and 2011, respectively:

The Company has begun transferring legacy UFC and Interturbine customers into its consumables management segment systems. As a result, it is not practicable to report stand-alone revenues and operating earnings of the acquired businesses since the acquisition dates.

On October 26, 2010, the Company acquired the TSI Group (“TSI”), a privately-held company, for a net purchase of approximately $307 million in cash. TSI designs, engineers and manufactures customized, fully integrated, thermal management and interconnect solutions that address complex power management requirements of a broad range of customers in the aerospace and defense industries. The Company completed its evaluation and allocation of the purchase price for the TSI acquisition during the period ended September 30, 2011 which resulted in a $17.9 increase in non-amortizing identifiable intangible assets and a $17.9 decrease in goodwill. The excess of the purchase price over the fair value of the identifiable net tangible assets acquired approximated $282.8 of which $72.6 has been allocated to identified intangible assets and $210.2 is included in goodwill.

On October 27, 2010, the Company acquired the aerospace fastener distribution business of Satair A/S (“Satair”), for approximately $162 million in cash. Satair is a distributor of consumables to European and Asia Pacific aerospace manufacturers and their suppliers. The Company completed its evaluation and allocation of the purchase price for the Satair acquisition during the period ended September 30, 2011. The excess of the purchase price over the fair value of identifiable net tangible assets acquired approximated $92.8 of which $16.1 has been allocated to identified intangible assets and $76.7 is included in goodwill.

Approximately $70.4 of goodwill and other intangibles related to the 2011 and 2010 Acquisitions are expected to be deductible for tax purposes.