ACQUISITIONS

9 Months Ended

Sep. 30, 2012

ACQUISITIONS

ACQUISITIONS

NOTE 10 – ACQUISITIONS

On July 3, 2012, the Company completed its acquisition of Rumpler - Technologies S.A., together with its direct and indirect subsidiaries (“Stelmi”).  Stelmi is a producer of elastomer primary packaging components for injectable drug delivery and operates two manufacturing plants located in the Normandy region of France and also has a research and development facility located near Paris.  The Company acquired all of the shares of Stelmi.  The purchase price paid for Stelmi (net of cash acquired) was approximately $188 million and was funded by cash on hand.

Stelmi contributed sales of $25.3 million and a pretax loss of $2.1 million (including $5.0 million of fair value and other acquisition adjustments) for the three months ended September 30, 2012.  The results of the acquired business for the period from the acquisition date are included in the accompanying consolidated financial statements and are reported in the Pharma reporting segment.

For the three and nine months ended September 30, 2012, we recognized $0.2 million and $6.0 million, respectively, in transaction costs related to the acquisition of Stelmi.  These costs are reflected in the selling, research & development and administrative section of the Condensed Consolidated Statements of Income.

The following table summarizes the assets acquired and liabilities assumed as of the acquisition date at estimated fair value.  If additional information is obtained about these assets and liabilities within the measurement period (not to exceed one year from the date of acquisition), the Company may refine its estimates of fair value to allocate the purchase price more accurately; however, any such revisions are not expected to be significant.

	July 3, 2012
Assets
Cash and equivalents	$	68,335
Accounts receivable	23,540
Inventories	16,826
Prepaid and other	3,256
Property, plant and equipment	42,073
Goodwill	109,749
Intangible assets	47,134
Other miscellaneous assets	5,236
Liabilities
Current maturities of long-term obligations	675
Accounts payable and accrued liabilities	25,900
Long-term obligations	885
Deferred income taxes	22,439
Retirement and deferred compensation plans	10,076
Net assets acquired	$	256,174

The following table is a summary of the fair value estimates of the acquired identifiable intangible assets and weighted-average useful lives as of the acquisition date:

	Weighted-Average	Estimated
	Useful Life	Fair Value
	(in years)	of Asset
Customer relationships	15	$	7,438
Technology	15	37,191
Trademark	4	2,505
Total		$	47,134

Goodwill in the amount of $109.7 million was recorded for the acquisition of Stelmi and is included in the Pharma segment.  Goodwill is calculated as the excess of the consideration transferred over the net assets acquired and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized.  Goodwill largely consists of leveraging the Company’s commercial presence in selling the Stelmi line of products in markets where Stelmi didn’t previously operate and the ability of Stelmi to maintain its competitive advantage from a technical viewpoint.  Goodwill will not be amortized, but will be tested for impairment at least annually.  We do not expect any of the goodwill will be deductible for tax purposes.

The unaudited pro forma results presented below include the effects of the Stelmi acquisition as if it had occurred as of January 1, 2011.  The unaudited pro forma results reflect certain adjustments related to the acquisition, such as the amortization associated with estimates for the acquired intangible assets and fair value adjustments for inventory.  The 2012 supplemental pro forma earnings were adjusted to exclude $4.3 million (after tax) of transaction costs, including consulting, legal, and advisory fees.  The 2012 supplemental pro forma earnings were adjusted to exclude $2.7 million (after tax) of nonrecurring expense related to the fair value adjustment to acquisition-date inventory.  The 2011 supplemental pro forma earnings were adjusted to include these adjustments.

The pro forma results do not include any synergies or other expected benefits of the acquisition.  Accordingly, the unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been completed on the dates indicated.

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands except per share data)	2012		2011		2012		2011
Net Sales	$	589,598	$	625,954	$	1,823,660	$	1,881,421
Net Income Attributable to AptarGroup, Inc.	44,628		51,492		138,839		145,118
Net Income per common share - basic	0.67		0.78		2.09		2.17
Net Income per common share - diluted	0.65		0.75		2.02		2.08

In November 2011, the Company acquired a 20% minority investment in Oval Medical Technologies Limited (Oval Medical) for approximately $3.2 million.  In February 2012, the Company acquired an additional 2% minority investment for approximately $0.3 million.  Oval Medical has broad expertise in the design and development of injectable drug delivery devices.  This investment represents an opportunity for the Pharma segment to enter a new category and broaden our product portfolio and customer reach.  This investment is being accounted for under the equity method of accounting from the date of acquisition.

In October 2011, the Company acquired TKH Plastics Pvt Ltd (“TKH”), a leading provider of injection molded dispensing closures in India for approximately $17 million in cash and approximately $1 million in assumed debt.  The acquisition will allow the Company to expand its geographical presence in India.  After allocating a portion of the purchase price to fixed and intangible assets, goodwill of approximately $10.9 million was recorded on the transaction.  The results of operations subsequent to the acquisition are included in the reported income statement.  TKH is included in the Beauty + Home reporting segment.

The Oval Medical and TKH acquisitions described above did not have a material impact on the consolidated financial statements and therefore pro forma information is not presented.