Avnet 2013 Annual Report Download - page 51

Table of Contents AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Internix, Inc., a company publicly traded on the Tokyo Stock Exchange, was acquired in the first quarter of fiscal 2013 through a tender
offer. After assessing the assets acquired and liabilities assumed, the consideration paid was below book value even though the price paid per
share represented a premium to the trading levels at that time. During fiscal 2013, the Company recognized a total gain on bargain purchase
related to Internix of $32,679,000 pre- and after tax and $0.23
per share on a diluted basis (inclusive of adjustments occurring subsequent to the
acquisition date).
In addition to the acquisitions described above, during fiscal 2013, the Company acquired the remaining non-
controlling interest in a
consolidated subsidiary for a purchase price that was less than its carrying value. The Company has reflected the difference between the
purchase price and the carrying value of the non-controlling interest as additional paid-
in capital in the accompanying consolidated statement of
shareholders' equity for fiscal 2013.
2012 Acquisitions
During fiscal 2012 , the Company acquired 11 businesses for total consideration of $413,585,000
, which consisted of the following (in
thousands):
The contingent consideration arrangements stipulate the Company pay up to a maximum of approximately $124,419,000
of additional
consideration to the former shareholders of the acquired businesses upon the achievement of certain operating results. The Company estimated
the fair value of the contingent consideration using an income approach which is based on significant inputs not observable in the market and
thus represents a Level 3 measurement as defined in ASC 820. The Company adjusts the contingent consideration periodically based on changes
to the inputs used in the income approach and the accretion of interest associated with the discounted liability. During fiscal 2013, the Company
reversed an earn-
out liability related to a 2012 acquisition for which payment is no longer expected to be incurred and recorded a charge of
$11,172,000 that is included in "Restructuring, integration and other charges" in the accompanying consolidated statement of operations.
Cash paid for acquisitions during fiscal 2012 was $313,218,000 , net of cash acquired and holdback reserves.
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the respective acquisition dates
(in thousands):
The $246,425,000
of goodwill was assigned to the Electronics Marketing and Technology Solutions reportable segments in the amounts of
$179,989,000 and $66,436,000
, respectively. The goodwill recognized is attributable primarily to expected synergies and the assembled
workforce of the acquired businesses. The amount of goodwill that is expected to be deductible for income
48
Cash
$
390,410
Contingent consideration
23,175
Total
$
413,585
Cash
$
75,016
Accounts receivable, net
132,195
Inventory
59,463
Other current assets
23,936
Property, plant and equipment
9,729
Other assets
104,368
Total identifiable assets acquired
404,707
Current liabilities
(230,747
)
Other long term liabilities
(2,483
)
Total liabilities assumed
(233,230
)
Net identifiable assets acquired
171,477
Goodwill
246,425
Bargain purchase recognized
(4,317
)
Net assets acquired
$
413,585