Rayovac 2010 Annual Report Download - page 172

SPECTRUM BRANDS HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
September 30, 2009, respectively. The Predecessor Company recorded $11 and $(707) during the period from
October 1, 2008 through August 30, 2009 and Fiscal 2008, respectively, related to the European Initiatives. The
Company has recorded pretax restructuring and related charges of $26,965 since the inception of the European
Initiatives.
The following table summarizes the remaining accrual balance associated with the 2006 initiatives and
activity that have occurred during Fiscal 2010:
European Initiatives Summary
Termination
Benefits
Other
Costs Total
Accrual balance at September 30, 2009 .................................. $2,623 $ 319 $2,942
Provisions ......................................................... (92) — (92)
Cash expenditures ................................................... (528) (251) (779)
Non-cash items ..................................................... (202) (21) (223)
Accrual balance at September 30, 2010 .................................. $1,801 $ 47 $1,848
(15) Acquisition
On June 16, 2010, the Company merged with Russell Hobbs. Headquartered in Miramar, Florida, Russell Hobbs
is a designer, marketer and distributor of a broad range of branded small household appliances. Russell Hobbs
markets and distributes small kitchen and home appliances, pet and pest products and personal care products.
Russell Hobbs has a broad portfolio of recognized brand names, including Black & Decker, George Foreman,
Russell Hobbs, Toastmaster, LitterMaid, Farberware, Breadman and Juiceman. Russell Hobbs’ customers
include mass merchandisers, specialty retailers and appliance distributors primarily in North America, South
America, Europe and Australia.
The results of Russell Hobbs operations since June 16, 2010 are included in the Company’s Consolidated
Statements of Operations. The financial results of Russell Hobbs are reported as a separate business segment,
Small Appliances. Russell Hobbs contributed $237,576 in Net sales, and recorded Operating loss of $320 for the
period from June 16, 2010 through the period ended September 30, 2010, which includes $13,400 of Acquisition
and integration related charges.
In accordance with ASC Topic 805, “Business Combinations” (“ASC 805”), the Company accounted for
the Merger by applying the acquisition method of accounting. The acquisition method of accounting requires that
the consideration transferred in a business combination be measured at fair value as of the closing date of the
acquisition. After consummation of the Merger, the stockholders of Spectrum Brands, inclusive of Harbinger,
own approximately 60% of SB Holdings and the stockholders of Russell Hobbs own approximately 40% of SB
Holdings. Inasmuch as Russell Hobbs is a private company and its common stock was not publicly traded, the
closing market price of the Spectrum Brands common stock at June 15, 2010 was used to calculate the purchase
price. The total purchase price of Russell Hobbs was approximately $597,579 determined as follows:
Spectrum Brands closing price per share on June 15, 2010 .......................... $ 28.15
Purchase price—Russell Hobbs allocation—20,704 shares(1)(2) ..................... $575,203
Cash payment to pay off Russell Hobbs’ North American credit facility ............... 22,376
Total purchase price of Russell Hobbs .......................................... $597,579
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