Rayovac 2006 Annual Report Download - page 106

94 SPECTRUM BRANDS | 2006 ANNUAL REPORT
(17) Acquisitions
Acquisition of Jungle Labs
On September 1, 2005, the Company acquired Jungle Labs for
approximately $29,000, which included $26,000 cash consider-
ation at closing, $1,000 paid after closing and $2,000 of non-
compete arrangements to be earned and paid through August 31,
2007. The aggregate purchase price included acquisition related
expenditures of approximately $200. Cash acquired totaled approx-
imately $600. The purchase agreement also contains a provision for
contingent earnout payments not to exceed $3,500. The total
earnout calculation is based upon net sales of Jungle Labs products
through August 31, 2007. Such amounts to be paid, if any, will be
recorded as additional acquisition consideration. Based in San
Antonio, Texas, Jungle Labs is a leading manufacturer and marketer
of premium water and fi sh care products, including water condi-
tioners, plant and fi sh foods, fi sh medications and other products
designed to maintain an optimal environment in aquariums or
ponds. Jungle Labs generates annual revenues of approximately
$14,000. The fi nancial results of Jungle Labs are included in the
Global Pet business segment within the Company’s condensed
consolidated results.
As of September 1, 2005
Current assets $ 3,000
Property, plant, and equipment 1,000
Intangible assets 10,000
Goodwill 19,000
Total assets acquired 33,000
Current liabilities 3,000
Short-term debt –
Long-term liabilities 3,000
Total liabilities assumed 6,000
Net assets acquired $27,000
Less: Cash acquired (600)
Payments for acquisitions $26,400
None of the goodwill acquired in this transaction is deduct-
ible for tax purposes. See also Note 6, Intangible Assets, for addi-
tional information on the intangible assets acquired in the Jungle
Labs acquisition.
Acquisition of Tetra
On April 29, 2005, the Company acquired all of the outstand-
ing equity interests of Tetra for a purchase price of approximately
$550,000, net of cash acquired of approximately $13,000 and
inclusive of a fi nal working capital payment of $2,400, made in July
2005. The aggregate purchase price also included acquisition
related expenditures of approximately $16,100. Tetra manufac-
tures, distributes and markets a comprehensive line of foods,
equipment and care products for fi sh and reptiles, along with acces-
sories for home aquariums and ponds. Tetra operates in over 90
countries and holds leading market positions in Europe, North
America and Japan. The fi nancial results of Tetra are included in the
Global Pet business segment within the Company’s condensed
consolidated results. The following table summarizes the fair value
of the assets acquired and liabilities assumed as of the date of the
acquisition using the exchange rates in effect as of that date.
As of April 29, 2005
Current assets $ 89,000
Property, plant, and equipment 35,000
Intangible assets 234,000
Goodwill 326,000
Other assets 9,000
Total assets acquired 693,000
Current liabilities 34,000
Short-term debt –
Long-term liabilities 96,000
Total liabilities assumed 130,000
Net assets acquired $563,000
Less: Cash acquired (13,000)
Payments for acquisitions $550,000
None of the goodwill acquired in this transaction is deduct-
ible in the determination of income taxes. See also Note 6,
Intangible Assets, for additional information on the intangible
assets acquired in the Tetra acquisition.
Acquisition of United
On February 7, 2005, the Company completed the acquisi-
tion of all of the outstanding equity interests of United, a leading
manufacturer and marketer of products for the consumer lawn
and garden care and household insect control markets in North
America and a leading supplier of specialty pet products to the
pet supply industry in the United States. The acquisition of United
allows the Company to gain signifi cant presence in several new
consumer products markets, including categories that will signif-
icantly diversify the Company’s revenue base. Subsequent to the
acquisition, the fi nancial results of the lawn and garden and
household insect control business of United are included in the
North America business segment and the fi nancial results of the
pet business of United are included in the Global Pet business
segment within the Company’s consolidated results.
The aggregate purchase price was approximately $1,490,000,
net of cash acquired of approximately $14,000. The purchase
price consisted of cash consideration of approximately $1,051,000
and common stock totaling approximately $439,000. The aggre-
gate purchase price included acquisition related expenditures of
approximately $22,000. The value of common stock was deter-
mined based on 13,750 shares at $31.94 per share. The share
price of $31.94 used in the calculation of the purchase price is
based on a fi ve-day average beginning on December 30, 2004.
The following table summarizes the fair value of the assets
acquired and liabilities assumed as of the date of the acquisition
using the exchange rates in effect as of that date.
2006 Form 10-K Annual Report
Spectrum Brands, Inc.