Black & Decker 2011 Annual Report Download - page 71

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59
lives, can materially impact the Company’s results from operations. The Company will finalize the Niscayah purchase accounting for
the various open items as soon as reasonably possible during the measurement period. The finalization of the Company’s purchase
accounting assessment will result in changes in the valuation of assets and liabilities acquired which the Company does not expect to
be material.
OTHER 2011 ACQUISITIONS
During 2011, the Company completed nine additional acquisitions for a total purchase price of $216.2 million, net of cash acquired.
The largest of these acquisitions were Infologix, Inc. (“Infologix”) and Microtec Enterprises, Inc. (“Microtec”, which operates under
the business name “AlarmCap”), which were purchased for $60.0 million and $58.8 million, respectively. Infologix is a leading
provider of enterprise mobility solutions for the healthcare and commercial industries and will add an established provider of mobile
workstations and asset tracking solutions. AlarmCap is a full service monitoring provider which significantly increases the Company’s
Canadian footprint. Both acquisitions are part of the Company’s Security Segment. The Company also completed seven small
acquisitions across all segments for a combined purchase price of $97.4 million. The purchase accounting for these 2011 acquisitions
is preliminary, principally with respect to finalization of intangible asset valuations, amongst others.
2010 ACQUISITIONS
During 2010, the Company completed ten acquisitions for a total purchase price of $550.3 million, of which approximately $451.6
million related to CRC-Evans. The net assets acquired of CRC-Evans, including $181.2 million of intangible assets, were
approximately $233.6 million and the resulting goodwill was $218.0 million. The total purchase price for the acquisitions was
allocated to the assets acquired and liabilities assumed based on their estimated fair values. The purchase price allocation for these
acquisitions is complete. There were no significant changes to the purchase price allocations made during 2011.
MERGER
The Merger occurred on March 12, 2010 and the total fair value of consideration transferred as part of the Merger was $4,656.5
million, inclusive of all former Black & Decker shares outstanding and employee related equity awards. The transaction was
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 merger date. The purchase price allocation for Black & Decker was completed
during the first quarter of 2011. The measurement period adjustments recorded in the first quarter of 2011 did not have a significant
impact on the Company’s Consolidated Statements of Operations, Balance Sheet, or Statements of Cash Flows. The following table
summarizes the fair values of major assets acquired and liabilities assumed as part of the Merger:
(Millions of Dollars)
Cash ................................................................................................................
$ 949.4
Accounts and notes receivable, net .................................................................
907.2
Inventories, net ...............................................................................................
1,066.3
Prepaid expenses and other current assets ......................................................
257.7
Property, plant and equipment ........................................................................
545.2
Trade names ....................................................................................................
1,505.5
Customer relationships ...................................................................................
383.7
Licenses, technology and patents....................................................................
112.3
Other assets .....................................................................................................
243.4
Short-term borrowings ....................................................................................
(175.0)
Accounts payable ............................................................................................
(479.1)
Accrued expenses and other current liabilities ...............................................
(849.9)
Long-term debt ...............................................................................................
(1,657.1)
Post-retirement benefits ..................................................................................
(775.8)
Deferred taxes .................................................................................................
(808.5)
Other liabilities ...............................................................................................
(517.8)
Total identifiable net assets ............................................................................
$ 707.5
Goodwill .........................................................................................................
3,949.0
Total consideration transferred .......................................................................
$ 4,656.5
The amount allocated to trade names includes $1.362 billion for indefinite-lived trade names. The weighted-average useful lives
assigned to the finite-lived intangible assets are trade names — 14 years; customer relationships — 15 years; and licenses, technology
and patents — 12 years. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and
represents the expected revenue and cost synergies of the combined business, assembled workforce, and the going concern nature of
Black & Decker. It is estimated that $167.7 million of goodwill, relating to Black & Decker’s pre-merger historical tax basis, will be
deductible for tax purposes.