Rayovac 2010 Annual Report Download - page 173

SPECTRUM BRANDS HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
(1) Number of shares calculated based upon conversion formula, as defined in the Merger Agreement, using
balances as of June 16, 2010.
(2) The fair value of 271 shares of unvested restricted stock units as they relate to post combination services
will be recorded as operating expense over the remaining service period and were assumed to have no fair
value for the purchase price.
Preliminary Purchase Price Allocation
The total purchase price for Russell Hobbs was allocated to the preliminary net tangible and intangible
assets based upon their preliminary fair values at June 16, 2010 as set forth below. The excess of the purchase
price over the preliminary net tangible assets and intangible assets was recorded as goodwill. The preliminary
allocation of the purchase price was based upon a valuation for which the estimates and assumptions are subject
to change within the measurement period (up to one year from the acquisition date). The primary areas of the
preliminary purchase price allocation that are not yet finalized relate to the certain legal matters, amounts for
income taxes including deferred tax accounts, amounts for uncertain tax positions, and net operating loss
carryforwards inclusive of associated limitations, and the final allocation of goodwill. The Company expects to
continue to obtain information to assist it in determining the fair values of the net assets acquired at the
acquisition date during the measurement period. The preliminary purchase price allocation for Russell Hobbs is
as follows:
Current assets ............................................................ $307,809
Property, plant and equipment ............................................... 15,150
Intangible assets .......................................................... 363,327
Goodwill (A) ............................................................. 120,079
Other assets .............................................................. 15,752
Total assets acquired ....................................................... $822,117
Current liabilities .......................................................... 142,046
Total debt ................................................................ 18,970
Long-term liabilities ....................................................... 63,522
Total liabilities assumed .................................................... $224,538
Net assets acquired ........................................................ $597,579
(A) Consists of $25,426 of tax deductible Goodwill.
Preliminary Pre-Acquisition Contingencies Assumed
The Company has evaluated and continues to evaluate pre-acquisition contingencies relating to Russell
Hobbs that existed as of the acquisition date. Based on the evaluation to date, the Company has preliminarily
determined that certain pre-acquisition contingencies are probable in nature and estimable as of the acquisition
date. Accordingly, the Company has preliminarily recorded its best estimates for these contingencies as part of
the preliminary purchase price allocation for Russell Hobbs. The Company continues to gather information
relating to all pre-acquisition contingencies that it has assumed from Russell Hobbs. Any changes to the
pre-acquisition contingency amounts recorded during the measurement period will be included in the purchase
price allocation. Subsequent to the end of the measurement period any adjustments to pre-acquisition
contingency amounts will be reflected in the Company’s results of operations.
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