UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
Amendment No. 2
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 26, 2012
Belden Inc.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
Delaware | 001-12561 | 36-3601505 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
7733 Forsyth Boulevard, Suite 800
St. Louis, Missouri 63105
(Address of Principal Executive Offices, including Zip Code)
(314) 854-8000
(Registrants telephone number, including area code)
n/a
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if this Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 9.01 Financial Statements and Exhibits. | ||
SIGNATURES | ||
EXHIBIT INDEX |
Exhibit 99.1 Unaudited combined condensed pro forma financial information of Belden Inc. and Miranda Technologies Inc. as of and for the six months ended July 1, 2012 and for the year ended December 31, 2011
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This Amendment No. 2 on Form 8-K/A amends and supplements the Current Report on Form 8-K of Belden Inc. (the Company) filed with the Securities and Exchange Commission on August 1, 2012 (the Initial Form 8-K) to include pro forma financial information permitted pursuant to Item 9.01 of Form 8-K to be excluded from the Initial Form 8-K and filed by amendment to the Initial Form 8-K no later than 71 days after the date on which the Initial Form 8-K was required to be filed. As previously reported in the Initial Form 8-K, on July 27, 2012, the Company acquired 97.37% of the outstanding common shares of Miranda Technologies Inc. (Miranda), and effective as of July 30, 2012, the Company completed the necessary steps to allow it to be deemed the 100% owner of Miranda.
Item 9.01. Financial Statements and Exhibits.
(b) | Pro Forma Financial Information |
An unaudited pro forma combined condensed balance sheet for the Company and Miranda as of July 1, 2012, unaudited pro forma combined condensed statements of operations for the six-month period ended July 1, 2012 and for the year ended December 31, 2011, and the notes thereto.
(d) | Exhibits |
Exhibit 99.1 Unaudited combined condensed pro forma financial information of Belden Inc. and Miranda Technologies Inc. as of and for the six months ended July 1, 2012 and for the year ended December 31, 2011.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
BELDEN INC. | ||||||
Date: October 12, 2012 | By: | /s/ Kevin L. Bloomfield | ||||
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Kevin L. Bloomfield | ||||||
Senior Vice President, Secretary and | ||||||
General Counsel |
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Exhibit 99.1
BELDEN INC.
Unaudited Combined Condensed Pro Forma Financial Information
as of and for the six months ended July 1, 2012 and for the year ended December 31, 2011
INTRODUCTION
We acquired 97.37% of the shares of Miranda Technologies Inc. (Miranda) for cash of $364.8 million on July 27, 2012, and we acquired the remaining 2.63% of shares of Miranda for cash of $9.9 million on July 30, 2012 (the Miranda Acquisition). Miranda is a leading provider of hardware and software solutions for the broadcast infrastructure industry, including solutions for television broadcasters and content developers to create, manipulate, and distribute High Definition Video. Its solutions span the full breadth of television operations, including production, playout, and delivery. Mirandas headquarters are located in Montreal, Canada, with significant operations in the United States and the United Kingdom as well as a global sales presence. Mirandas strong brands and technology enhance our portfolio of broadcast products.
In order to finance the purchase price, we borrowed CAN$250.0 million under a new term loan (the Term Loan). The remainder of the purchase price was funded with available cash.
Pro Forma Financial Information
We have prepared the unaudited combined condensed financial information set forth below to reflect the acquisition of Miranda by the application of pro forma adjustments to the historical financial statements of Belden. The periods presented consist of an unaudited pro forma combined condensed balance sheet as of July 1, 2012, and unaudited pro forma combined condensed statements of operations for the six months ended July 1, 2012 and the year ended December 31, 2011.
We have derived the unaudited combined condensed pro forma financial information by applying pro forma adjustments to the historical consolidated financial statements of Belden, as included in our Quarterly Report on Form 10-Q for the quarter ended July 1, 2012, and our Annual Report on Form 10-K for the year ended December 31, 2011. We have extracted the historical condensed consolidated financial statements of Miranda from its quarterly financial statements as of and for the six months ended June 30, 2012 and its Annual Report for the year ended December 31, 2011.
The unaudited pro forma combined condensed balance sheet as of July 1, 2012 gives pro forma effect to the Miranda Acquisition as if it occurred on July 1, 2012. The unaudited pro forma combined condensed statements of operations for the six months ended July 1, 2012 and the year ended December 31, 2011 give pro forma effect to the Miranda Acquisition as if it had occurred on January 1, 2011.
The unaudited combined condensed pro forma financial information is for informational purposes only and should not be considered indicative of actual results that would have been achieved had the Miranda Acquisition actually been consummated on the dates indicated and does not purport to be indicative of results of operations as of any future date or for any future period.
BELDEN INC.
PRO FORMA COMBINED CONDENSED BALANCE SHEET
July 1, 2012
(Unaudited)
Historical Belden Inc. |
Historical Miranda Technologies Inc. |
Pro Forma Adjustments |
Pro Forma Combined |
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(In thousands) | ||||||||||||||||
ASSETS | ||||||||||||||||
Current assets: |
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Cash and cash equivalents |
$ | 337,278 | $ | 38,287 | $ | (134,002 | )(i) | $ | 241,563 | |||||||
Receivables, net |
322,572 | 31,158 | | 353,730 | ||||||||||||
Inventories, net |
183,954 | 19,259 | 10,321 | (ii) | 213,534 | |||||||||||
Deferred income taxes |
20,073 | | (4,810 | )(iii) | 15,263 | |||||||||||
Other current assets |
21,013 | 7,310 | (5,105 | )(iv) | 23,218 | |||||||||||
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Total current assets |
884,890 | 96,014 | (133,596 | ) | 847,308 | |||||||||||
Property, plant and equipment, less accumulated depreciation |
287,802 | 30,608 | (7,354 | )(v) | 311,056 | |||||||||||
Goodwill |
343,795 | 43,568 | 116,818 | (vi) | 504,181 | |||||||||||
Intangible assets, less accumulated amortization |
143,513 | 30,556 | 126,892 | (vii) | 300,961 | |||||||||||
Deferred income taxes |
19,128 | | (19,128 | )(iii) | | |||||||||||
Other long-lived assets |
65,193 | 12,690 | (11,444 | )(viii) | 66,439 | |||||||||||
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$ | 1,744,321 | $ | 213,436 | $ | 72,188 | $ | 2,029,945 | |||||||||
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LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||||||||||
Current liabilities: |
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Accounts payable |
$ | 214,595 | $ | 20,714 | $ | | $ | 235,309 | ||||||||
Accrued liabilities |
124,413 | 10,188 | (2,848 | )(ix) | 131,753 | |||||||||||
Current maturities of long-term debt |
| | 9,128 | (x) | 9,128 | |||||||||||
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Total current liabilities |
339,008 | 30,902 | 6,280 | 376,190 | ||||||||||||
Long-term debt |
550,265 | | 234,297 | (x) | 784,562 | |||||||||||
Postretirement benefits |
129,421 | | | 129,421 | ||||||||||||
Deferred income taxes |
| | 2,624 | (iii) | 2,624 | |||||||||||
Other long-term liabilities |
27,827 | 18,431 | (6,910 | )(xi) | 39,348 | |||||||||||
Stockholders equity: |
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Common stock |
503 | 95,801 | (95,801 | )(xii) | 503 | |||||||||||
Other stockholders equity |
697,297 | 68,302 | (68,302 | )(xii) | 697,297 | |||||||||||
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Total stockholders equity |
697,800 | 164,103 | (164,103 | ) | 697,800 | |||||||||||
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$ | 1,744,321 | $ | 213,436 | $ | 72,188 | $ | 2,029,945 | |||||||||
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See accompanying notes to unaudited combined condensed pro forma financial information.
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BELDEN INC.
PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JULY 1, 2012
(Unaudited)
Historical Belden Inc. |
Historical Miranda Technologies Inc. |
Pro Forma Adjustments |
Pro Forma Combined |
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(In thousands, except per share amounts) | ||||||||||||||||
Revenues |
$ | 948,333 | $ | 86,333 | $ | (3,937 | )(i) | $ | 1,030,729 | |||||||
Cost of sales |
(654,694 | ) | (34,052 | ) | 364 | (ii) | (688,382 | ) | ||||||||
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Gross profit |
293,639 | 52,281 | (3,573 | ) | 342,347 | |||||||||||
Selling, general and administrative expenses |
(161,157 | ) | (32,880 | ) | (835 | )(iii) | (194,872 | ) | ||||||||
Research and development |
(29,062 | ) | (12,002 | ) | (275 | )(iv) | (41,339 | ) | ||||||||
Amortization of intangibles |
(5,805 | ) | | (10,636 | )(v) | (16,441 | ) | |||||||||
Income from equity method investment |
4,701 | | | 4,701 | ||||||||||||
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Operating income (loss) |
102,316 | 7,399 | (15,319 | ) | 94,396 | |||||||||||
Interest expense |
(24,423 | ) | | (4,432 | )(vi) | (28,855 | ) | |||||||||
Interest income |
562 | | 93 | (vii) | 655 | |||||||||||
Other income (expense) |
| (3,477 | ) | 3,477 | (viii) | | ||||||||||
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Income (loss) from continuing operations before taxes |
78,455 | 3,922 | (16,181 | ) | 66,196 | |||||||||||
Income tax benefit (expense) |
(11,790 | ) | (1,187 | ) | 6,087 | (ix) | (6,890 | ) | ||||||||
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Income (loss) from continuing operations |
$ | 66,665 | $ | 2,735 | $ | (10,094 | ) | $ | 59,306 | |||||||
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Weighted average number of common shares and equivalents: |
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Basic |
45,720 | 45,720 | ||||||||||||||
Diluted |
46,623 | 46,623 | ||||||||||||||
Basic income per share from continuing operations |
$ | 1.46 | $ | 1.30 | ||||||||||||
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Diluted income per share from continuing operations |
$ | 1.43 | $ | 1.27 | ||||||||||||
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See accompanying notes to unaudited combined condensed pro forma financial information.
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BELDEN INC.
PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2011
(Unaudited)
Historical Belden Inc. |
Historical Miranda Technologies Inc. |
Pro Forma Adjustments |
Pro Forma Combined |
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(In thousands, except per share data) | ||||||||||||||||
Revenues |
$ | 1,981,953 | $ | 183,502 | $ | (15,554 | )(i) | $ | 2,149,901 | |||||||
Cost of sales |
(1,410,134 | ) | (72,301 | ) | 6,136 | (ii) | (1,476,299 | ) | ||||||||
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Gross profit |
571,819 | 111,201 | (9,418 | ) | 673,602 | |||||||||||
Selling, general and administrative expenses |
(325,950 | ) | (61,760 | ) | 2,888 | (iii) | (384,822 | ) | ||||||||
Research and development |
(55,711 | ) | (22,934 | ) | 186 | (iv) | (78,459 | ) | ||||||||
Amortization of intangibles |
(13,772 | ) | | (20,434 | )(v) | (34,206 | ) | |||||||||
Income from equity method investment |
13,169 | | | 13,169 | ||||||||||||
Asset impairment |
(2,549 | ) | | | (2,549 | ) | ||||||||||
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Operating income (loss) |
187,006 | 26,507 | (26,778 | ) | 186,735 | |||||||||||
Interest expense |
(48,126 | ) | | (9,474 | )(vi) | (57,600 | ) | |||||||||
Interest income |
1,011 | | 153 | (vii) | 1,164 | |||||||||||
Other income (expense) |
| 482 | (482 | )(viii) | | |||||||||||
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Income (loss) from continuing operations before taxes |
139,891 | 26,989 | (36,581 | ) | 130,299 | |||||||||||
Income tax benefit (expense) |
(24,638 | ) | (4,228 | ) | 12,945 | (ix) | (15,921 | ) | ||||||||
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Income (loss) from continuing operations |
$ | 115,253 | $ | 22,761 | $ | (23,636 | ) | $ | 114,378 | |||||||
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Weighted average number of common shares and equivalents: |
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Basic |
47,109 | 47,109 | ||||||||||||||
Diluted |
48,104 | 48,104 | ||||||||||||||
Basic income per share from continuing operations |
$ | 2.45 | $ | 2.43 | ||||||||||||
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Diluted income per share from continuing operations |
$ | 2.40 | $ | 2.38 | ||||||||||||
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See accompanying notes to unaudited combined condensed pro forma financial information.
4
BELDEN INC.
Notes to Unaudited Combined Condensed Pro Forma Financial Information
as of and for the six months ended July 1, 2012 and for the year ended December 31, 2011
1. Basis of Presentation
The unaudited combined condensed pro forma financial information was prepared to reflect the Miranda Acquisition. The unaudited pro forma adjustments are based on managements preliminary estimates of the values of the tangible and intangible assets and liabilities acquired. As a result, the actual adjustments, when finalized, may differ materially from those presented in this unaudited pro forma financial information. There can be no assurance that a change in unaudited pro forma adjustments for the acquisition will not result in material changes to the information presented.
In managements opinion, the unaudited combined condensed pro forma financial information reflects adjustments that are both necessary to present fairly the unaudited pro forma combined condensed balance sheet and the unaudited pro forma combined condensed statements of operations as of and for the periods indicated and are reasonable given the information currently available. Pro forma adjustments include the effects of events that are directly attributable to the acquisition and are factually supportable. Material non-recurring profits and losses that result directly from the acquisition have not been included in the unaudited pro forma combined condensed statements of operations, including the recognition of the step-up in value of inventory in our cost of sales, the amortization of the sales backlog intangible asset, and adjusting Mirandas historical deferred revenue to fair value.
The unaudited combined condensed pro forma financial information is for illustrative and informational purposes only and is not intended to represent what our financial position or results from operations would have been had the Miranda Acquisition been completed at the dates indicated. The unaudited combined condensed pro forma financial information should not be considered indicative of our future financial position or results of operations.
This information should be read in conjunction with Beldens historical financial statements and accompanying notes in our Annual Report on Form 10-K for the year ended December 31, 2011 and Mirandas historical financial statements and the accompanying notes that are included in its Annual Report for the year ended December 31, 2011.
2. Business Combination Accounting
The unaudited combined condensed pro forma financial information reflects the Miranda Acquisition using business combination accounting, which requires the measurement of the fair value of identifiable assets acquired and liabilities assumed. We have estimated the fair values as presented in the pro forma financial information using commonly accepted valuation methodologies. We are in the process of completing a formal valuation process. The valuation of acquired assets and assumed liabilities involves significant assumptions, certain risks, and various uncertainties, and actual results may differ materially from those estimates.
We will continue to refine our valuation modeling as information regarding the tangible and intangible assets is obtained, which will likely result in changes to the fair value measurements and estimates as presented herein. Upon completion of the valuation procedures, we will revise the fair values of the acquired assets and assumed liabilities, as necessary.
5
The allocation of the purchase price was based upon preliminary valuation models and our estimates and assumptions. The allocation is subject to change, although we will undertake to complete the final allocation of the purchase price within twelve months following the date of closing of the Miranda Acquisition. In the opinion of management, the unaudited combined condensed pro forma financial information purports a reasonable valuation of the Miranda Acquisition and provides for all adjustments necessary to reflect the effects of the transaction.
3. Miranda Technologies Inc. Historical Financial Statements
The Miranda historical financial statements presented within the unaudited combined condensed pro forma financial information have been translated from Canadian dollars into U.S. dollars at the following exchange rates: (i) $0.9737 per Canadian dollar for the unaudited pro forma condensed combined balance sheet as of July 1, 2012; (ii) $0.9946 per Canadian dollar for the unaudited pro forma condensed combined statement of operations for the six months ended July 1, 2012, and (iii) $1.0089 per Canadian dollar for the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2011. In addition, the Miranda historical financial statements are presented in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. Our preliminary estimates of the necessary adjustments to present the Miranda financial statements in conformity with accounting principles generally accepted in the United States are included in the Pro Forma Adjustments described in Note 4.
4. Pro Forma Adjustments
Generally, the adjustments in each of the statements presented above represent the following: (i) adjustments of the historical net book values of the assets acquired and liabilities assumed to estimated fair value and the associated income statement effects, such as revised amortization and depreciation expense as a result of the fair value adjustments and changes to estimated useful lives; (ii) the impact of financing the purchase price of the Miranda Acquisition, including the payment of cash and issuance of the Term Loan, and the associated income statement effects, such as incremental interest expense, including incremental amortization of deferred financing costs; (iii) adjustments to the historical financial statements of Miranda in order to present Mirandas financial statements in conformity with accounting principles generally accepted in the United States and in accordance with Belden accounting policies; and (iv) consideration of the income tax implications of the pro forma adjustments.
The unaudited pro forma combined financial information presented above reflects the following specific adjustments:
Pro Forma Combined Condensed Balance Sheet
as of July 1, 2012
(i) | net cash outflow to fund a portion of the Miranda Acquisition purchase price of $125.9 million, the transaction costs associated with issuing the Term Loan to finance the remaining portion of the Miranda Acquisition purchase price of $1.6 million, and other transaction costs of $6.5 million; |
(ii) | the estimated fair value adjustments on inventory; |
(iii) | the recording of estimated deferred taxes as a result of the pro forma adjustments; |
(iv) | the reclassification of $5.4 million of certain deferred taxes of Miranda from other current assets to deferred taxes in order to be presented in accordance with accounting principles generally accepted in the United States and the capitalization of $0.3 million of the transaction costs associated with the issuance of the Term Loan, which will be amortized using the effective interest method over the life of the Term Loan; |
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(v) | the estimated fair value adjustments on property, plant, and equipment; |
(vi) | the remaining excess purchase price over fair value of the acquired tangible and intangible assets, net of assumed liabilities, which is recorded as goodwill, net of Mirandas historical goodwill; |
(vii) | the estimated fair value of intangible assets recorded through purchase accounting, net of Mirandas historical intangible assets; |
(viii) | the reclassification of $12.7 million of deferred taxes of Miranda from other long-lived assets to deferred taxes in order to be presented in accordance with accounting principles generally accepted in the United States and the capitalization of $1.3 million of the transaction costs associated with the issuance of the Term Loan, which will be amortized using the effective interest method over the life of the Term Loan; |
(ix) | the estimated fair value adjustments on current deferred revenue; |
(x) | the issuance of the Term Loan to fund a portion of the Miranda Acquisition purchase price; |
(xi) | the reclassification of $12.9 million of deferred taxes of Miranda from other long-term liabilities to deferred taxes in order to be presented in accordance with accounting principles generally accepted in the United States, the recording of $7.6 million of estimated uncertain tax position liabilities in accordance with accounting principles generally accepted in the United States, and the estimated fair value adjustments on non-current deferred revenue of $1.6 million; |
(xii) | the reversal of Mirandas historical equity. |
Pro Forma Combined Condensed Statements of Operations
for the six months ended July 1, 2012
(i) | the estimated deferral of revenue associated with a Miranda product line in accordance with accounting principles generally accepted in the United States; |
(ii) | the estimated deferral of $0.8 million of cost of sales associated with a Miranda product line in accordance with accounting principles generally accepted in the United States, the reclassification of $0.6 million of certain other expense items of Miranda into cost of sales in order to present such items in conformity with accounting principles generally accepted in the United States and on a basis consistent with Beldens accounting policies, and a $0.2 million reduction of depreciation expense associated with cost of sales as a result of estimated fair value measurements for property, plant, and equipment; |
(iii) | a reclassification of $2.9 million of certain other expense items of Miranda (including stock based compensation expenses) into selling, general and administrative expenses in order to present such items in accordance with accounting principles generally accepted in the United States and on a basis consistent with Beldens accounting policies, the elimination of $1.4 million of amortization of intangible assets previously recorded by Miranda, and a $0.7 million reduction for depreciation expense associated with selling, general and administrative expenses as a result of estimated fair value measurements for property, plant, and equipment; |
(iv) | a reclassification of $1.7 million of certain research and development credits of Miranda from a reduction of research and development expense to a reduction of income tax expense in order to present such items in conformity with accounting principles generally accepted in the United States and on a basis consistent with Beldens accounting policies, the elimination of $1.3 million of amortization of intangible assets previously recorded by Miranda, and a $0.2 million reduction for depreciation expense associated with research and development as a result of estimated fair value measurements for property, plant, and equipment; |
(v) | the effects of amortization resulting from the estimated adjustments to the value of intangible assets; |
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(vi) | the impact of incremental interest expense of $4.2 million and amortization of deferred financing costs on the Term Loan issued to fund a portion of the purchase price of the Miranda Acquisition of $0.2 million; |
(vii) | the reclassification of Mirandas interest income from other income to interest income in order to present interest income on a basis consistent with Beldens accounting policies; |
(viii) | a reclassification of certain other income (expense) items of Miranda in order to present such items in conformity with accounting principles generally accepted in the United States and on a basis consistent with Beldens accounting policies; |
(ix) | a reclassification of $1.7 million of certain research and development credits of Miranda from a reduction of research and development expense to a reduction of income tax expense in order to present such items in conformity with accounting principles generally accepted in the United States and on a basis consistent with Beldens accounting policies and the estimated tax effect of the incremental income or losses related to these pro forma adjustments of $4.4 million. |
Pro Forma Combined Condensed Statements of Operations
for the year ended December 31, 2011
(i) | the estimated deferral of revenue associated with a Miranda product line in accordance with accounting principles generally accepted in the United States; |
(ii) | the estimated deferral of $3.1 million of cost of sales associated with a Miranda product line in accordance with accounting principles generally accepted in the United States, the reclassification of $2.6 million of certain other income (expense) items of Miranda into cost of sales in order to present such items in conformity with accounting principles generally accepted in the United States and on a basis consistent with Beldens accounting policies, and a $0.4 million reduction of depreciation expense associated with cost of sales as a result of estimated fair value measurements for property, plant, and equipment; |
(iii) | a reclassification of $1.6 million of certain other expense items of Miranda (including stock based compensation expenses) into selling, general and administrative expenses in order to present such items in accordance with accounting principles generally accepted in the United States and on a basis consistent with Beldens accounting policies, the elimination of $3.1 million of amortization of intangible assets previously recorded by Miranda, and a $1.4 million reduction for depreciation expense associated with selling, general and administrative expenses as a result of estimated fair value measurements for property, plant, and equipment; |
(iv) | a reclassification of $3.1 million of certain research and development credits of Miranda from a reduction of research and development expense to a reduction of income tax expense in order to present such items in conformity with accounting principles generally accepted in the United States and on a basis consistent with Beldens accounting policies, the elimination of $2.9 million of amortization of intangible assets previously recorded by Miranda, and a $0.3 million reduction for depreciation expense associated with research and development as a result of estimated fair value measurements for property, plant, and equipment; |
(v) | the effects of amortization resulting from the estimated adjustments to the value of intangible assets; |
(vi) | the impact of incremental interest expense of $8.5 million, amortization of deferred financing costs on the Term Loan issued to fund a portion of the purchase price of the Miranda Acquisition of $0.3 million; and a reclassification of $0.6 million of Mirandas interest expense from other income (expense) to interest expense in order to be presented on a basis consistent with Beldens accounting policies; |
(vii) | the reclassification of Mirandas interest income from other income to interest income in order to present interest income on a basis consistent with Beldens accounting policies; |
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(viii) | a reclassification of certain other income (expense) items of Miranda in order to present such items in conformity with accounting principles generally accepted in the United States and on a basis consistent with Beldens accounting policies; |
(ix) | a reclassification of $3.1 million of certain research and development credits of Miranda from a reduction of research and development expense to a reduction of income tax expense in order to present such items in conformity with accounting principles generally accepted in the United States and on a basis consistent with Beldens accounting policies and the estimated taxable effect of the incremental income or losses related to these pro forma adjustments of $9.8 million. |
5. Preliminary Estimated Allocation of Purchase Price
The following table summarizes the estimated fair value of the assets acquired and the liabilities assumed as presented in the pro forma combined condensed balance sheet above, as of July 1, 2012.
(In thousands) | ||||
Cash |
$ | 31,732 | ||
Receivables |
31,158 | |||
Inventories |
29,580 | |||
Other current assets |
1,893 | |||
Property, plant and equipment |
23,254 | |||
Goodwill |
160,386 | |||
Intangible assets |
157,448 | |||
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Total assets |
$ | 435,451 | ||
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Accounts payable |
$ | 20,714 | ||
Accrued liabilities |
7,340 | |||
Current deferred tax liabilities |
4,810 | |||
Other long-term liabilities |
11,521 | |||
Non-current deferred tax liabilities |
21,752 | |||
Total liabilities |
66,137 | |||
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|
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Net assets |
$ | 369,314 | ||
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For purposes of the above allocation, we have estimated a fair value adjustment for inventories based on the estimated selling price of the work-in-process and finished goods acquired at the closing date less the sum of the estimated costs to complete the work-in process, the costs of disposal, and a reasonable profit allowance for our post acquisition selling efforts. We based our estimate of the fair value of the acquired property, plant and equipment and intangible assets on preliminary estimates, which will be finalized based upon the completion of a valuation study performed by a third party valuation firm.
6. Long-Term Debt
We borrowed a CAN$250 million Term Loan in order to fund a portion of the purchase price for the acquisition of Miranda. The Term Loan matures in 2017 and requires quarterly amortization payments beginning in the fourth quarter of 2012. Interest on the Term Loan is variable, based upon the three-month Canadian money-market rate plus an applicable spread. We paid $1.6 million of fees associated with the Term Loan, which will be amortized over the life of the Term Loan using the effective interest method.
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