Graco 2008 Annual Report Download - page 51

Newell Rubbermaid Inc. 2008 Annual Report
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In December 2008, the FASB issued Staff Position No.132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets” (“FSP SFAS 132(R)-1”).
FSP SFAS 132(R)-1 amends SFAS No.132 (revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits—an amendment of
FASB Statements No. 87, 88, and 106” (“SFAS 132(R)”), to require additional disclosures about assets held in an employer’s defined benefit pension
or other postretirement plan using the guidance in SFAS 157. FSP SFAS 132(R)-1 also amends SFAS 157 to clarify that defined benefit pension or
other postretirement plan assets are not subject to disclosure requirements under SFAS 157. FSP SFAS 132(R)-1 is effective for fiscal years ending
after December 15, 2009, with early adoption permitted. The adoption of FSP SFAS 132(R)-1 is not expected to have a material impact on the Company’s
financial statements.
FOOTNOTE 2
ACQUISITIONS
Technical Concepts
On April 1, 2008, the Company acquired 100% of the outstanding limited liability company interests of Technical Concepts Holdings, LLC (“Technical Concepts”)
for $452.7 million, which includes transaction costs and the repayment of Technical Concepts’ outstanding debt obligations at closing. Technical Concepts
provides touch-free and automated restroom hygiene systems in the away-from-home washroom category. The Technical Concepts acquisition gives the
Company’s Rubbermaid Commercial Products business an entry into the away-from-home washroom market and fits within the Company’s strategy of
leveraging its existing sales and marketing capabilities across additional product categories. In addition, with approximately 40% of its sales outside the
U.S., Technical Concepts increases the global footprint of the Company’s Rubbermaid Commercial Products business.
This acquisition was accounted for using the purchase method of accounting and accordingly, the Company allocated the total purchase price to the
identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. Based on the
preliminary purchase price allocation, the Company allocated $41.4 million of the purchase price to identified tangible net assets and $93.5 million of the
purchase price to identified intangible assets. The Company recorded the excess of the purchase price over the aggregate fair values of $317.8 million as
goodwill. Technical Concepts’ results of operations are included in the Company’s Consolidated Financial Statements since the acquisition date, and for the
nine months ended December 31, 2008, Technical Concepts contributed net sales of $109.2 million. Pro forma results of operations for historical periods
would not be materially different and therefore are not presented.
Aprica
On April 1, 2008, the Company acquired substantially all of the assets of Aprica Childcare Institute Aprica Kassai, Inc. (“Aprica”), a maker of strollers, car
seats and other children’s products, headquartered in Osaka, Japan. The Company acquired Aprica’s assets for $145.7 million, which includes transaction
costs and the repayment of Aprica’s outstanding debt obligations at closing. Aprica is a Japanese brand of premium strollers, car seats and other related
juvenile products. The acquisition provides the opportunity for the Company’s Baby & Parenting Essentials business to broaden its presence worldwide,
including expanding the scope of Aprica’s sales outside of Asia. The closing of the purchase of Aprica’s operations in China occurred in October 2008, and
the assets acquired and liabilities assumed are included in the amount of net liabilities acquired and goodwill recorded in the Aprica acquisition; however,
the impact of the acquisition of Aprica’s China operations did not significantly impact the overall Aprica purchase price allocation.
This acquisition was accounted for using the purchase method of accounting and accordingly, the Company allocated the total purchase price to the
identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. Based on the
preliminary purchase price allocation, the Company allocated $(32.8) million of the purchase price to identified tangible net liabilities and $57.0 million of
the purchase price to identified intangible assets. The Company recorded the excess of purchase price over the aggregate fair values of $121.5 million as
goodwill. Aprica’s results of operations are included in the Company’s Consolidated Financial Statements since the acquisition date, and for the nine months
ended December 31, 2008, Aprica contributed net sales of $95.5 million. Pro forma results of operations for historical periods would not be materially
different and therefore are not presented.
Acquisition of Endicia
On July 1, 2007, the Company acquired all of the outstanding equity interests of PSI Systems, Inc. (“Endicia”), provider of Endicia Internet Postage, for
$51.2 million plus related acquisition costs and contingent payments of up to $25.0 million based on future revenues. The acquisition of Endicia, a leading
provider of online postage, increases the Company’s ability to leverage its other technology brands by developing a full range of innovative and integrated
solutions for small and medium-sized businesses. This acquisition was accounted for using the purchase method of accounting and accordingly, based on
the Company’s purchase price allocation, the Company has recorded goodwill of $47.5 million in the Consolidated Balance Sheet at December 31, 2008.
Pro forma results of operations for historical periods would not be materially different and therefore are not presented.
Endicia is party to a lawsuit filed against it alleging patent infringement which was filed on November 22, 2006 in the U.S. District Court for the
Central District of California. In this case, Stamps.com seeks injunctive relief in order to prevent Endicia from continuing to engage in activities that are
alleged to infringe on Stamps.com’s patents. An unfavorable outcome in this litigation, which management does not believe is probable, could materially
adversely affect the Endicia business.