Black & Decker 2011 Annual Report Download - page 70

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58
Depreciation and amortization expense associated with property, plant and equipment was as follows:
(Millions of Dollars)
2011
2010
2009
Depreciation ................................................................................................
.....
$ 194.4
$ 177.4 $ 76.1
Amortization ................................................................................................
....
34.1
26.0 19.4
Depreciation and amortization expense ................................
...........................
$ 228.5
$ 203.4 $ 95.5
E. MERGER AND ACQUISITIONS
NISCAYAH
On September 9, 2011 the Company established a controlling ownership interest of 95% in Niscayah. This was accomplished as part
of an existing tender offer to purchase all Niscayah outstanding shares at a price of 18 SEK per share, whereby the Company increased
its ownership interest from 5.8% of the outstanding shares of Niscayah at July 2, 2011 to 95% of the outstanding shares at
September 9, 2011. Over the remainder of the year, the Company purchased additional outstanding shares of Niscayah, bringing the
Company’s total ownership interest in Niscayah to 99% at December 31, 2011. The remaining outstanding shares will be purchased
over the next three months for approximately $10.5 million at a price of 18 SEK per share plus interest at 2% per annum over the
Stockholm Interbank Offered Rate (“STIBOR”). The total purchase price paid for Niscayah as of December 31, 2011 is $984.5
million. The Company’s pre-acquisition equity interest in Niscayah was remeasured as of the acquisition date to a share price of 18
SEK per share. The resulting mark to market adjustment was not significant.
The Niscayah acquisition has been accounted for using the acquisition method of accounting which requires, among other things, the
assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The following table summarizes the
estimated fair values of major assets acquired and liabilities assumed:
(Millions of Dollars)
Cash and cash equivalents ................................................................
..................
$ 21.1
Accounts and notes receivable, net ................................................................
.....
186.0
Inventories, net ................................................................................................
...
72.0
Prepaid expenses and other current assets ................................
..........................
45.3
Property, plant and equipment ................................................................
............
46.3
Trade names ................................................................................................
........
10.0
Customer relationships ................................................................
.......................
400.0
Other assets ................................................................................................
.........
49.1
Short-term borrowings ................................................................
........................
(202.9)
Accounts payable ................................................................
................................
(55.8)
Deferred taxes ................................................................................................
.....
(147.7)
Other liabilities ................................................................................................
...
(187.1)
Non
-controlling interests ................................................................
....................
(11.6)
Total identifiable net assets ................................................................
................
$ 224.7
Goodwill ................................................................................................
.............
759.8
Total consideration transferred ................................................................
...........
$ 984.5
Niscayah is one of the largest access control and surveillance solutions providers in Europe. Niscayah’s integrated security solutions
include video surveillance, access control, intrusion alarms and fire alarm systems, and its offerings include design and installation
services, maintenance and repair, and monitoring systems. The acquisition expands and complements the Company’s existing security
product offerings and further diversifies the Company’s operations and international presence.
The weighted average useful life assigned to the trade names was 5 years and to customer relationships was 12 years.
Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the expected cost
synergies of the combined business, assembled workforce, and the going concern nature of Niscayah.
The purchase price allocation for Niscayah is preliminary in certain respects. During the measurement period the Company expects to
record adjustments relating to the finalization of intangible, inventory and property, plant and equipment valuations, for various
opening balance sheet contingencies and for various income tax matters, amongst others. A single estimate of fair value results from a
complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. The Company’s
judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset