Acquisitions and divestitures

During the first half of fiscal 2014, the Company completed three acquisitions with historical annualized revenue of approximately $490 million. Cash paid for acquisitions during the first half of fiscal 2014 was $116.9 million, net of cash acquired and contingent consideration. The Company has not disclosed the pro-forma impact of the fiscal 2014 acquisitions as such impact was not material.

The aggregate consideration for the acquisitions was $219.7 million, which consisted of the following (in thousands):



Cash paid	$	181,645
Contingent consideration	38,081
Total	$	219,726

The contingent consideration arrangements stipulate that the Company pay up to a maximum of approximately $50 million of additional consideration to the former shareholders of the acquired businesses based upon the achievement of certain future operating results. The Company estimated the fair value of the contingent consideration using an income approach, which is based on significant inputs, primarily forecasted future operating results of the acquired businesses, not observable in the market and thus represents a Level 3 measurement as defined in ASC 820. The Company adjusts the fair value of contingent consideration if there are changes to the inputs used in the income approach and as a result of the passage of time.

The Company has not yet completed its evaluation and determination of the fair value of certain assets and liabilities acquired, primarily (i) the final valuation of amortizable intangible assets acquired, (ii) the final valuation of contingent consideration due to the sellers, (iii) the final assessment of working capital acquired and liabilities assumed, and (iv) the final valuation of certain income tax accounts. The Company expects these final valuations and assessments will be completed by the end of fiscal 2014, which may result in adjustments to the preliminary values presented in the following table:



	Preliminary Acquisition Method Values
	(Thousands)
Cash	$	64,763
Accounts receivable, net	36,233
Inventory	95,477
Other current assets	3,504
Property, plant and equipment and other non-current assets	9,680
Intangible assets	55,543
Total identifiable assets acquired	$	265,200

Accounts payable, accrued liabilities and other current liabilities	63,961
Short-term borrowings	45,942
Other long-term liabilities	15,149
Total identifiable liabilities assumed	$	125,052
Net identifiable assets acquired	140,148
Goodwill	79,578
Net assets acquired	$	219,726

Goodwill of $69.0 million was assigned to the Electronics Marketing segment and goodwill of $10.6 million was assigned to the Technology Solutions segment. The goodwill recognized is attributable primarily to expected synergies of the acquired businesses. The amount of goodwill that is expected to be deductible for income tax purposes is not material. The Company periodically adjusts the value of goodwill to reflect changes that occur as a result of adjustments to the preliminary purchase price allocation during the measurement periods following the dates of acquisition.

The Company has recognized restructuring, integration, and other expenses associated with acquisitions, which are described further in Note 13.

Gain on bargain purchase and other

During the first quarter of fiscal 2013, the Company acquired Internix, Inc., a company publicly traded on the Tokyo Stock Exchange, through a tender offer. After assessing the assets acquired and liabilities assumed, the consideration paid was below book value even though the price paid per share represented a premium to the trading levels at that time. During the first half of fiscal 2013, the Company recognized a total gain on bargain purchase related to Internix of $33.0 million before and after tax and $0.23 per share on a diluted basis (inclusive of adjustments occurring subsequent to the first quarter of fiscal 2013).

In addition, during the second quarter of fiscal 2013, the Company divested a small business in TS Asia for which it recognized a loss of $1.7 million before and after tax and $0.01 per share on a diluted basis. The combination of this loss on divestiture and the gain on bargain purchase noted above resulted in a gain of $31.4 million for the first half of fiscal 2013.

During the first half of fiscal 2013, the Company received proceeds of $3.6 million, net of cash divested, related to the divestiture described above and the receipt of an earn-out payment associated with a divestiture completed in the prior fiscal year, for which there was no gain or loss as the proceeds were applied against the contingent consideration receivable that was established at the time of sale.