Ingram Micro 1999 Annual Report Download - page 42

4400
Ingram Micro
Annual Report
The reorganization charges and related activity for the fiscal year ended January 1, 2000, are summarized as follows:
Amount Paid
1999 and Charged Remaining
Reorganization Against the Liability at
Charge Liability Adjustments January 1, 2000
Employee termination benefits $12,322 $(10,614) $—$1,708
Software costs 6,381 (6,381) ——
Facility costs 1,519 (672) (235) 612
Other costs 761 (318) (443) —
Total $20,983 $(17,985) $(678) $2,320
Note 4 — Acquisitions
In January 1999, the Company purchased 44,114,340 shares of the common stock of Ingram Micro Asia Ltd. (formerly known
as Electronic Resources Ltd., “ERL”) from certain shareholders, which increased the Company’s ownership to 39.6% from the 21%
ownership held in 1998. In accordance with Singapore law, the Company was required to extend a tender offer for the remaining
shares and warrants of ERL as a result of its increased ownership.The Company offered to purchase the remaining outstanding
shares and warrants for approximately $1.20 and $0.65 per share and warrant, respectively, during the tender offer period from
January 4, 1999, to February 19, 1999. In addition, during January and February 1999, the Company made open market purchases
of ERL shares and warrants.As a result of the open market purchases and the tender offer, the Company’s ownership in ERL
increased to approximately 95%.In the third quarter of 1999, the Company commenced a take-over offer for the remaining ERL
shares and warrants not already owned by Ingram Micro.As a result of the takeover, the Company purchased an additional
12,151,748 shares and 1,337,962 warrants of ERL, increasing the Company’s ownership position to 100% of the outstanding
shares of ERL and approximately 99% of the outstanding warrants.The aggregate purchase price paid during 1999 for these ERL
shares and warrants, net of cash acquired, was approximately $237,396.
Prior to 1999, the Company accounted for its investment in ERL, which totaled approximately $71,212, under the equity
method. Due to the purchase of ERL common stock and warrants in 1999, the Company has consolidated the results of ERL.The
Company has accounted for the acquisition of ERL under the purchase method; accordingly, the results of ERL’s operations have
been combined with those of the Company for the year ended January 1, 2000.The purchase price was allocated to the assets
acquired and liabilities assumed based on their estimated fair values at the date of acquisition.The excess of the purchase price,
including the $71,212 paid in December 1997, over the net assets acquired was approximately $240,506 and is being amortized
on a straight-line basis over 30 years.
In April 1999, the Company acquired ITG Computers, an Australian computer products distributor. In addition, the
Company’s majority-owned Macrotron subsidiary increased its ownership of Walton Kft., a Hungarian-based computer products
distributor, from approximately 33% to 100% in September 1999.Total cash paid for these acquisitions was approximately $4,532,
net of cash acquired.These acquisitions were accounted for using the purchase method, and the results of their operations have
been combined with those of the Company since their acquisition dates.The purchase price was allocated to the assets acquired
and liabilities assumed based on their estimated fair values at the dates of acquisition.The excess of the purchase prices over the
net assets acquired amounts to approximately $4,922 and is being amortized on a straight-line basis over 10 years.
In July 1998, the Company completed the acquisition of approximately 99% and 91% of the outstanding common and
preferred stock, respectively, of Macrotron AG (“Macrotron”) for approximately $100,000 in cash. Macrotron is based in Munich,
Germany, and operates primarily in Germany, Austria, and Switzerland.The acquisition was accounted for using the purchase
method, and the results of Macrotron’s operations have been combined with those of the Company since July 1, 1998, the effective
date of acquisition.The purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair val-
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