Staples 2004 Annual Report Download - page 105

STAPLES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
NOTE C Business Acquisitions and Equity Method Investments (Continued)
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of
acquisition, including net purchase price adjustments of $7.2 million, which reduced goodwill, in 2003 (in thousands):
As of October 18, 2002
Current assets ............................................... $104,180
Property and equipment ....................................... 42,156
Other assets ................................................ 2,331
Intangible assets ............................................. 211,820
Goodwill ................................................... 633,361
Total assets acquired .......................................... 993,848
Current liabilities ............................................ 116,040
Long-term debt .............................................. 12,669
Deferred tax liability .......................................... 72,027
Other long-term liabilities ...................................... 7,423
Total liabilities assumed ........................................ 208,159
Net assets acquired ........................................... $785,689
Of the $211.8 million of acquired intangible assets, $138.2 million was assigned to registered trademarks and trade
names which have indefinite lives and are not subject to amortization, $72.0 million was assigned to customer-related
intangible assets that are being amortized over a weighted average useful life of 12.9 years and $1.6 million was assigned
to non-competition agreements that are being amortized over their useful life of three years.
Medical Arts Press:
On July 17, 2002, Staples acquired 100 percent of the outstanding shares of Medical Arts Press, Inc. (‘‘MAP’’) for an
aggregate purchase price of $383.2 million, net of cash acquired. The purchase price consisted entirely of cash and cash
equivalents. The results of MAP have been included in the consolidated financial statements since that date. MAP is an
operating division of Quill and is included in North American Delivery for segment reporting. MAP is a leading direct
marketer of specialized printed office products and practice-related supplies to medical offices. The acquisition of MAP
provides an opportunity to sell traditional office products to MAP’s customer base and expand Quill’s and Staples’
product offerings.
In connection with this acquisition, Staples recorded $349.5 million of goodwill and intangible assets, net of fiscal
2003 purchase price adjustments, which were assigned to our North American Delivery segment. None of the goodwill
recorded is expected to be deductible for tax purposes. Staples also accrued for merger-related and integration costs of
approximately $7.0 million. As of January 29, 2005, approximately $3.5 million has been charged against this accrual and
approximately $3.5 million remains accrued for these merger-related and integration costs.
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