Acquisitions

The Company has acquired a number of businesses during the past three years. The results of operations of these acquired businesses have been included in the consolidated results from the respective acquisition dates. The purchase prices for these acquisitions have been allocated to tangible and intangible assets and liabilities of the businesses based upon estimates of their respective fair values.

In the third quarter of 2018, the Company acquired Industrial Gas Springs Group Holdings Limited (“IGS”), a recognized designer, manufacturer and supplier of customized gas springs. IGS is headquartered in the United Kingdom, with distribution and assembly capabilities in the United States. Its diversified end markets include general industrial, transportation, aerospace, and medical, among others. The Company acquired IGS for an aggregate purchase price of 29,138 British pound sterling ($38,016) which includes post closing adjustments under the terms of the Share Purchase Agreement, including 2,820 British pound sterling ($3,679) related to cash acquired. The acquisition was financed using cash on hand and borrowings under the Company's revolving credit facility. In connection with the acquisition, the Company recorded $14,098 of goodwill and $15,300 of intangible assets. See Note 6 to the Consolidated Financial Statements.

In the fourth quarter of 2018, the Company completed its acquisition of Gimatic S.r.l. (“Gimatic”). Gimatic designs and develops robotic grippers, advanced end-of-arm tooling systems, sensors and other automation components. Headquartered in Brescia, Italy, Gimatic has a sales network extending across Europe, North America and Asia. Its diversified end markets include automotive, packaging, health care, and food and beverage, among others. The Company acquired Gimatic for an aggregate purchase price of 362,352 Euro ($409,893), which includes preliminary adjustments under the terms of the Sale and Purchase Agreement, including approximately 7,790 Euro ($8,812) related to cash acquired, and is subject to post closing adjustments under the terms of the Sale and Purchase Agreement. The Company paid 357,994 Euro ($404,962) in cash, using cash on hand and additional borrowings under the Company's existing revolving credit facility, including the utilization of funds made available through the accordion feature provided by the facility, and recorded liabilities of 4,358 Euro ($4,931) for estimated payments to the seller under the terms of the Sale and Purchase Agreement. These liabilities are recorded within accrued liabilities within the Consolidated Balance Sheet as of December 31, 2018. In connection with the acquisition, the Company recorded $271,257 of goodwill and $158,800 of intangible assets. See Note 6 to the Consolidated Financial Statements.

The Company incurred $5,420 of acquisition-related costs during the year ended December 31, 2018 related to the IGS and Gimatic acquisitions. These costs include due diligence costs and transaction costs to complete the acquisition and have been recognized in the Consolidated Statements of Income as selling and administrative expenses.

The operating results of IGS and Gimatic have been included in the Consolidated Statements of Income since the dates of acquisition. For the year ended December 31, 2018, the Company reported $6,360 in net sales and an operating loss of $1,726 at IGS, inclusive of $2,887 of short-term purchase accounting adjustments, and $8,793 in net sales and an operating loss of $2,109 at Gimatic, inclusive of $2,707 of short-term purchase accounting adjustments. IGS and Gimatic results have been included within the Industrial segment's operating profit.

The following table summarizes the fair values of the assets acquired, net of cash acquired, and liabilities assumed at the October 31, 2018 date of acquisition for Gimatic and the July 23, 2018 acquisition date for IGS. Fair values are inclusive of purchase price adjustments that were made subsequent to the respective acquisition dates:



	IGS			Gimatic
Accounts receivable	$	3,300		$	11,552
Inventories	5,706			21,112
Prepaid expenses and other current assets	198			7,743
Deferred income taxes	—			917
Property, plant and equipment, net	1,557			7,167
Goodwill (Note 6)	14,098			271,257
Other intangible assets, net (Note 6)	15,300			158,800
Other assets	—			144
Total assets acquired	40,159			478,692

Accounts payable	(927		)	(3,825		)
Accrued liabilities	(603		)	(14,096		)
Debt assumed	—			(5,990		)
Other liabilities	(678		)	(7,126		)
Deferred income taxes	(3,614		)	(46,574		)
Total liabilities assumed	(5,822		)	(77,611		)
Net assets acquired	$	34,337		$	401,081

The final purchase price allocation related to IGS reflects post-closing adjustments pursuant to the terms of the Share Purchase Agreement. The final purchase price allocation related to Gimatic remains subject to post-closing adjustments pursuant to the terms of the Sale and Purchase Agreement.

The following table reflects the unaudited pro forma operating results of the Company for the years ended December 31, 2018 and 2017, which give effect to the acquisitions of Gimatic and IGS as if they had occurred on January 1, 2017. The pro forma results are based on assumptions that the Company believes are reasonable under the circumstances. The pro forma results are not necessarily indicative of the operating results that would have occurred had the acquisitions been effective January 1, 2017, nor are they intended to be indicative of results that may occur in the future. The underlying pro forma information includes the historical financial results of the Company, Gimatic and IGS adjusted for certain items including amortization expense associated with the assets acquired and the Company’s expense related to financing arrangements, with the related tax effects. The pro forma information does not include the effects of any synergies or cost reduction initiatives related to the acquisitions.



	(Unaudited Pro Forma)
	2018		2017
Net Sales	$	1,555,481	$	1,501,515
Net Income	171,422		44,029
Per common share:
Basic:
Net Income	$	3.28	$	0.81
Diluted:
Net Income	$	3.24	$	0.81

Pro forma earnings during the year ended December 31, 2018 were adjusted to exclude non-recurring items including acquisition-related costs and amortization related to the fair value adjustment to inventory. Pro forma earnings in 2017 were adjusted to include acquisition-related costs of $5,420 and amortization of $10,905 related to the fair value adjustments to inventory.

In the second quarter of 2017, the Company completed its acquisition of the assets of the privately held Gammaflux L.P. business ("Gammaflux"), a leading supplier of hot runner temperature and sequential valve gate control systems to the plastics industry. Gammaflux, which is headquartered in Sterling, Virginia and has offices in Illinois and Germany, provides temperature control solutions for injection molding, extrusion, blow molding, thermoforming, and other applications. Its end markets include packaging, electronics, automotive, household products, medical, and tool building. The Company acquired the assets of Gammaflux for an aggregate purchase price of $8,866, which was financed using cash on hand and borrowings under the Company's revolving credit facility. The purchase price includes adjustments under the terms of the Asset Purchase Agreement, including $2 related to cash acquired. In connection with the acquisition, the Company recorded $1,535 of goodwill and $3,700 of intangible assets. See Note 6 to the Consolidated Financial Statements.

The Company incurred $210 of acquisition-related costs during the year ended December 31, 2017 related to the Gammaflux acquisition. These costs include due diligence costs and transaction costs to complete the acquisition and have been recognized in the Consolidated Statements of Income as selling and administrative expenses.

The operating results of Gammaflux since the date of acquisition have been included in the Consolidated Statements of Income for the period ended December 31, 2017. The Company reported $9,081 in net sales for Gammaflux for the year ended December 31, 2017. Gammaflux results have been included within the Industrial segment's operating profit.

In the third quarter of 2016, the Company, through three of its subsidiaries (collectively, the “Purchaser”), completed its acquisition of the molds business of Adval Tech Holding AG and Adval Tech Holdings (Asia) Pte. Ltd. ("FOBOHA"). FOBOHA is headquartered in Haslach, Germany and currently operates out of manufacturing facilities located in Germany and China. When acquired, FOBOHA also operated out of a third manufacturing facility located in Switzerland; however, this operation was consolidated and closed during 2017. See Note 9 to the Consolidated Financial Statements. The Company completed its purchase of the Germany and Switzerland businesses on August 31, 2016. The purchase of the China business required government approval which was granted on September 30, 2016. On October 7, 2016, shares of the China operations were subsequently transferred to the Company upon payment, per the terms of the Share Purchase Agreement for these respective operations ("China SPA"). The Company, pursuant to the terms and conditions within the Share Purchase Agreement ("FOBOHA SPA"), assumed economic control of the China business effective August 31, 2016. Having both economic control and the benefits and risks of ownership during the period from August 31, 2016 through September 30, 2016, the Company included the results of the China business within the consolidated results of operations of the Company during this period.

FOBOHA specializes in the development and manufacture of complex plastic injection molds for packaging, medical, consumer and automotive applications. The Company acquired FOBOHA for an aggregate cash purchase price of CHF 137,918 ($140,203) which was financed using cash on hand and borrowings under the Company's revolving credit facility. The purchase price includes adjustments under the terms of the FOBOHA SPA, including approximately CHF 11,342 ($11,530) related to cash acquired. In connection with the acquisition, the Company recorded $39,800 of intangible assets and $75,574 of goodwill. See Note 6 to the Consolidated Financial Statements.

The Company incurred $2,193 of acquisition-related costs during the year ended December 31, 2016 related to the FOBOHA acquisition. These costs include due diligence costs and transaction costs to complete the acquisition and have been recognized in the Company's Consolidated Statements of Income as selling and administrative expenses.

The operating results of FOBOHA since the date of acquisition have been included in the Consolidated Statements of Income for the period ended December 31, 2016. The Company reported $18,348 in net sales for FOBOHA for the year ended December 31, 2016. FOBOHA results have been included within the Industrial segment's operating profit.