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56
3. ACQUISITIONS AND DISPOSITIONS
On October 8, 2014, Nucor acquired the entire equity interest in Gallatin Steel Company (Gallatin) for a cash purchase price of
$779.1 million, including working capital adjustments. The acquisition was partially funded by the issuance of approximately $300
million of commercial paper with the remaining funds coming from cash on hand. Located on the Ohio River in Ghent, Kentucky,
Gallatin has an annual sheet steel production capacity of approximately 1,800,000 tons. This acquisition is strategically important
as it expands Nucor’s footprint in the Midwestern United States market, and it will broaden Nucor’s product offerings. Gallatin’s
financial results are included as part of the steel mills segment (see Note 23).
We have allocated the purchase price for Gallatin to its individual assets acquired and liabilities assumed.
The following table summarizes the fair values of the assets acquired and liabilities assumed of Gallatin as of the date of acquisition:
(in thousands)
Cash $ 48,957
Accounts receivable 82,291
Inventory 101,692
Other current assets 5,117
Property, plant and equipment 483,007
Goodwill 94,737
Other intangible assets 67,150
Other assets 2,529
Total assets acquired 885,480
Current liabilities 104,315
Long-term debt 2,093
Total liabilities assumed 106,408
Net assets acquired $779,072
The following table summarizes the purchase price allocation to the identifiable intangible assets of Gallatin as of the date of acquisition:
(in thousands, except years)
Weighted-
Average Life
Customer relationships $58,250 20 years
Trademarks and trade names 8,900 5 years
$67,150
The goodwill of $94.7 million is primarily attributed to the synergies expected to arise after the acquisition and has been allocated to the
steel mills segment (see Note 9). Goodwill recognized for tax purposes was $98.1 million, all of which is deductible for tax purposes.
Other minor acquisitions, exclusive of purchase price adjustments of acquisitions made and net of cash acquired, totaled $19.1 million
in 2015, $38.5 million in 2014, and none in 2013.