ACQUISITIONS AND DISPOSITIONS

6 Months Ended

Dec. 31, 2021

Discontinued Operations and Disposal Groups [Abstract]

That's How We Roll

On December 28, 2021, the Company acquired all outstanding stock of THWR, the producer and marketer of ParmCrisps® and Thinsters®, deepening the Company's position in the snacking category. Consideration for the transaction consisted of cash, net of cash acquired, totaling $260,871, subject to an adjustment for working capital. Of the total consideration, $254,569 was paid at closing, with the remaining $6,302 payable during the third quarter of fiscal 2022. The acquisition was funded with borrowings under the Credit Agreement (as defined in Note 9, Debt and Borrowings). The Company incurred $5,103 of transaction costs in connection with the acquisition which were expensed as incurred, and are included as a component of Selling, general and administrative expenses in the Company's Consolidated Statements of Operations for the three and six months ended December 31, 2021.

The following table summarizes the Company's preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition date. The Company expects to finalize the allocation during fiscal 2022.


	December 28, 2021
Accounts receivable, net	$	5,107
Inventory	9,871
Prepaid expenses and other current assets	603
Property, plant & equipment	9,225
Identifiable intangible assets	193,800
Operating lease right-of-use assets	4,098
Other assets	166
Deferred income taxes	(42,362)
Goodwill	93,629
Accounts payable & accrued expenses	(9,041)
Operating lease liabilities	(4,225)
	$	260,871

The fair values assigned to identifiable intangible assets acquired were based on assumptions and estimates made by management. Of the $193,800 of identifiable intangible assets acquired, $70,800 was preliminarily assigned to customer relationships with a weighted average estimated useful life of 17 years, and $123,000 was preliminarily assigned to tradenames with indefinite lives. The goodwill recorded as a result of this acquisition is not expected to be deductible for tax purposes.

Results of THWR are included in the United States operating segment, a component of the North America reportable segment. THWR's net sales and income from continuing operations before income taxes included in our consolidated results were not material for the three and six months ended December 31, 2021.

The following table provides unaudited pro forma results of continuing operations had the acquisition been completed at the beginning of fiscal 2021. The proforma information reflects certain adjustments related to the acquisition but does not reflect any potential operating efficiencies or cost savings that may result from the acquisition. Accordingly, this information has been provided for illustrative purposes only and does not purport to be indicative of the actual results that would have been achieved by the Company for the periods presented or that will be achieved by the combined company in the future. The pro forma information has been adjusted to give effect to items that are directly attributable to the transactions and are expected to have a continuing impact on the combined results.


	Unaudited supplemental pro forma information
	Three Months Ended December 31,				Six Months Ended December 31,
	2021		2020		2021		2020
Net sales	$	500,349	$	553,114	$	985,544	$	1,069,327
Net income (loss) from continuing operations(1)	$	36,244	$	1,102	$	55,669	$	(16,478)
Diluted net income (loss) per common share from continuing operations	$	0.38	$	0.01	$	0.58	$	(0.16)

(1)The proforma adjustments include the elimination of transaction costs totaling $5,103 from the three and six months ended December 31, 2021 and recognition of those costs in the six months ended December 31, 2020.

Dispositions

GG UniqueFiber®

On June 28, 2021, the Company completed the divestiture of its crispbread crackers business, GG UniqueFiber® (“GG”) for total cash consideration of $336. The sale of GG is consistent with the Company’s transformation and portfolio simplification process. GG operated in Norway and was part of the Company’s International reportable segment. The Company deconsolidated the net assets of GG during the twelve months ended June 30, 2021, recognizing a pre-tax loss on sale of $3,753 in the fourth quarter of fiscal 2021.

Dream® and WestSoy®

On April 15, 2021, the Company completed the divestiture of its North America non-dairy beverages business, consisting of the Dream® and WestSoy® brands, for total cash consideration of $33,000, subject to customary post-closing adjustments. The final purchase price was $31,320. The non-dairy beverage business was considered to be non-core within our broader North American business, and the sale aligns with the Company’s portfolio simplification process. The business operated out of the United States and Canada and was part of the Company’s North America reportable segment. The Company deconsolidated the net assets of the North American non-dairy beverage business during the twelve months ended June 30, 2021, recognizing a pre-tax gain on sale of $7,519 in the fourth quarter of fiscal 2021.

Fruit

In August 2020, the Company's Board of Directors approved a plan to sell its prepared fresh fruit, fresh fruit drinks and fresh fruit desserts division ("Fruit"), primarily consisting of the Orchard House® Foods Limited business and associated brands. This decision supported the Company's overall strategy as the Fruit business did not align, and had limited synergies, with the rest of the Company's businesses. The Company determined that the held for sale criteria was met and classified the assets and liabilities of the Fruit business as held for sale as of September 30, 2020 and December 31, 2020, recognizing a pre-tax non-cash loss for the three and six months ended December 31, 2020 of $23,596 and $56,093, respectively, to reduce the carrying value to its estimated fair value less costs to sell. The sale was completed on January 13, 2021 for a total cash consideration of $38,547, recognizing a pre-tax loss on sale of $1,904 during the third quarter of fiscal 2021.

Danival

The Company entered into a definitive stock purchase agreement on June 30, 2020 for the sale of its Danival business, a component of the International reportable segment, and the transaction closed on July 21, 2020. The Company deconsolidated the net assets of the Danival business upon closing of the sale during the quarter ended September 30, 2020, recognizing a pre-tax gain on sale of $611 during the first quarter of fiscal 2021.

Discontinued Operations

Sale of Tilda Business

On August 27, 2019, the Company sold the entities comprising the Tilda Group Entities and certain other assets of the Tilda business for an aggregate price of $342,000 in cash, subject to customary post-closing adjustments based on the balance sheets of the Tilda business. The disposition of the Tilda operating segment represented a strategic shift that had a major impact on the Company’s operations and financial results and has been accounted for as discontinued operations. The following table presents the major classes of Tilda’s results within Net income from discontinued operations, net of tax in our Consolidated Statements of Operations:


	Three Months Ended December 31,		Six Months Ended December 31,
	2020		2020
Net sales	$	—	$	—
Cost of sales	—		—
Gross profit	—		—


Other expense	—		75



Net loss from discontinued operations before income taxes	—		(75)
Provision (benefit) for income taxes(1)	11		(11,320)
Net (loss) income from discontinued operations, net of tax	$	(11)	$	11,245

(1) Includes $11,331 of tax benefit related to the tax gain on the sale of Tilda for the six months ended December 31, 2020.

There were no assets or liabilities from discontinued operations associated with Tilda as of December 31, 2021 or June 30, 2021.

The Company's dispositions are described in more detail in Note 5, Dispositions, in the Notes to the Consolidated Financial Statements in the Form 10-K.