Rayovac 2015 Annual Report Download - page 115
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
NOTE 3—ACQUISITIONS
The Company accounts for acquisitions by applying the acquisition method of accounting. The acquisition
method of accounting requires, among other things, that the assets acquired and liabilities assumed in a business
combination be measured at their fair values as of the closing date of the acquisition.
Armored AutoGroup
On May 21, 2015, the Company completed the acquisition of AAG, a consumer products company
consisting primarily of Armor All and STP products, two of the most recognizable brands in the automotive
aftermarket appearance products and performance chemicals categorizes, respectively, and the A/C PRO brand of
do-it-yourself automotive air conditioner recharge products. The results of AAG’s operations since May 21, 2015
are included in the Company’s Consolidated Statements of Operations and reported as a separate segment under
Global Auto Care for the year ended September 30, 2015.
The Company has recorded an allocation of the purchase price to the Company’s tangible and identifiable
intangible assets acquired and liabilities assumed based on their fair values as of the May 21, 2015 acquisition
date. The excess of the purchase price over the fair value of the net tangible assets and identifiable intangible
assets was recorded as goodwill, which includes value associated with the assembled workforce, including an
experienced research team. The calculation of purchase price and purchase price allocation is as follows:
Purchase Price
(in millions)
Cash consideration .............................. $929.3
Purchase Price
Allocation
(in millions)
Cash and cash equivalents ........................ $ 30.9
Receivables .................................... 156.1
Inventories .................................... 84.2
Prepaid expenses and other current assets ............ 8.2
Property, plant and equipment, net .................. 38.3
Goodwill ...................................... 972.1
Intangible assets ................................ 418.0
Deferred charges and other ........................ 16.5
Accounts payable and accrued liabilities ............. (116.1)
Long-term debt ................................. (540.0)
Other long term liabilities ......................... (138.9)
Net assets acquired .............................. $929.3
The purchase price allocation resulted in goodwill of $972.1 million of which $4.9 million is deductible for
tax purposes. Due to expected synergies in sales of legacy Spectrum branded products through new distribution
channels, the Company has allocated $38.9 million of the acquired goodwill to its Global Batteries and
101