Graco 2009 Annual Report Download - page 53

Newell Rubbermaid Inc. 2009 Annual Report
51
This acquisition was accounted for using the purchase method of accounting and accordingly, the Company allocated the total purchase price to the
identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. Based on the
purchase price allocation, the Company allocated $48.1 million of the purchase price to identified tangible net assets and $93.5 million of the purchase
price to identified intangible assets. The Company recorded the excess of the purchase price over the aggregate fair values of $311.1 million as goodwill.
Technical Concepts’ results of operations are included in the Company’s Consolidated Financial Statements since the acquisition date. Pro forma results of
operations for historical periods would not be materially different and therefore are not presented.
Aprica
On April 1, 2008, the Company acquired substantially all of the assets of Aprica Childcare Institute Aprica Kassai, Inc. (“Aprica”), a maker of strollers, car
seats and other children’s products, headquartered in Osaka, Japan. The Company acquired Aprica’s assets for $145.7 million, which includes transaction
costs and the repayment of Aprica’s outstanding debt obligations at closing. Aprica is a Japanese brand of premium strollers, car seats and other related
juvenile products. The acquisition provides the opportunity for the Company’s Baby & Parenting Essentials business to broaden its presence worldwide,
including expanding the scope of Aprica’s sales outside of Asia. The closing of the purchase of Aprica’s operations in China occurred in October 2008, and
the assets acquired and liabilities assumed are included in the amount of net liabilities acquired and goodwill recorded in the Aprica acquisition; however,
the impact of the acquisition of Aprica’s China operations did not significantly impact the overall Aprica purchase price allocation.
This acquisition was accounted for using the purchase method of accounting and accordingly, the Company allocated the total purchase price to the
identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. Based on the
purchase price allocation, the Company allocated $(34.7) million of the purchase price to identified tangible net liabilities and $57.0 million of the purchase
price to identified intangible assets. The Company recorded the excess of the purchase price over the aggregate fair values of $123.4 million as goodwill.
Aprica’s results of operations are included in the Company’s Consolidated Financial Statements since the acquisition date. Pro forma results of operations
for historical periods would not be materially different and therefore are not presented.
Endicia
On July 1, 2007, the Company acquired all of the outstanding equity interests of PSI Systems, Inc. (“Endicia”), provider of Endicia Internet Postage, for $51.2 million
plus related acquisition costs and contingent payments of up to $25.0 million based on future revenues. In 2009, the Company paid $10.0 million of the contingent
payments based on Endicia’s revenues, and an additional $15.0 million may be paid in subsequent periods based on Endicia’s future revenues. The acquisition of
Endicia, a leading provider of online postage, increases the Company’s ability to leverage its other technology brands by developing a full range of innovative and
integrated solutions for small and medium-sized businesses. This acquisition was accounted for using the purchase method of accounting and accordingly, based
on the Company’s purchase price allocation, the Company has recorded goodwill of $59.2 million in the Consolidated Balance Sheet at December 31, 2009. Pro forma
results of operations for historical periods would not be materially different and therefore are not presented.
Endicia is party to a lawsuit filed against it alleging patent infringement which was filed on November 22, 2006 in the U.S. District Court for the Central District
of California. In this case, Stamps.com seeks unspecified damages, attorneys’ fees and injunctive relief in order to prevent Endicia from continuing to engage in activities
that are alleged to infringe on Stamps.com’s patents. An unfavorable outcome in this litigation could materially adversely affect the Endicia business.
FOOTNOTE 3
DISCONTINUED OPERATIONS
The following table summarizes the results of businesses reported as discontinued operations for the years ended December 31, (in millions):
2009 2008 2007
Net sales $ — $ — $ 3.6
Loss from operations of discontinued operations $ — $ — $ (0.2)
Loss on disposal of discontinued operations, net of income tax benefit of $ — million,
$0.5 million and $3.0 million in 2009, 2008 and 2007, respectively — (0.5) (11.9)
Loss from discontinued operations, net of tax $ — $ (0.5) $(12.1)
No amounts related to interest expense have been allocated to discontinued operations.
In September 2006, the Company entered into an agreement for the sale of portions of the Home Décor Europe business to a global manufacturer and marketer
of window treatments and furnishings. The Central and Eastern European, Nordic and Portuguese operations of this business were sold on December 1, 2006.
The sale of the operations in Poland and the Ukraine closed on February 1, 2007. In October 2006, the Company received a binding offer for the sale of the Southern
European region of the Home Décor Europe business to another party. The sale of the operations in France and Spain closed on January 1, 2007 and in Italy on
January 31, 2007.
In connection with these transactions, the Company recorded a loss of $10.0 million, net of tax, in 2007 to complete the divestiture of Home Décor Europe.
The loss is reported in the table above as part of the loss on disposal of discontinued operations.
The remainder of the loss on disposal of discontinued operations for 2008 and 2007, approximately $0.5 million and $1.9 million, net of tax, related to
contingencies associated with other prior divestitures.