Sunbeam 2007 Annual Report Download - page 82

On August 8, 2007 the Company acquired all the outstanding shares of K2, a leading provider of branded
consumer products in the global sports equipment market in exchange for consideration $10.85 in cash per share
of K2 common stock and 0.1118 of a share of Jarden common stock for each share of K2 common stock issued
and outstanding. The total value of the transaction, including debt assumed, was approximately $1.2 billion. The
aggregate consideration to the K2 shareholders was approximately $701 and was comprised of a cash payment of
approximately $517 and the issuance of approximately 5.3 million common shares of the Company with a fair
value of approximately $184. The cash and Jarden common stock issued in the transaction had a combined value
of $14.72 per K2 share, which was calculated using the average of the closing stock price of a share of Jarden
common stock on the New York Stock Exchange (“NYSE”) during the five-day trading period ending two
trading days after the date that the number of shares of Jarden common stock to be received by K2 stockholders
was finalized, which was August 6, 2007. The total purchase price of $777, which is net of cash acquired, also
includes: the purchase of K2 share-based awards for $22.7, the Company’s investment in K2 prior to the
acquisition of $31.1, debt make-whole premiums of $15.4 and other fees and consideration totaling $20.1. In
connection with the Acquisition the Company repaid certain of K2’s debt, including accrued interest and the
aforementioned make-whole premiums for approximately $341. The Acquisition was recorded by allocating the
cost of the assets acquired, including intangible assets and liabilities assumed based on their estimated fair values
at the date of Acquisition. The excess of the cost of the Acquisition over the net of amounts assigned to the fair
value of the assets acquired and the liabilities assumed is recorded as goodwill. Based on the Company’s
preliminary independent valuation, which is subject to further refinement, the purchase price is allocated as
follows:
Preliminary Values Assigned (in millions):
Accounts receivable ......................................................... $317.2
Inventories ................................................................. 514.4
Current deferred tax asset ..................................................... 17.4
Other current assets .......................................................... 31.5
Property, plant and equipment ................................................. 146.1
Intangible assets ............................................................ 240.0
Goodwill .................................................................. 221.9
Other assets ................................................................ 11.8
Other current liabilities ....................................................... (251.1)
Long-term debt ............................................................. (401.8)
Other liabilities ............................................................. (25.8)
Non-current deferred tax liability ............................................... (44.8)
Total purchase price, net of cash acquired ........................................ $776.8
2006 Activity
During 2006, the Company completed four tuck-in acquisitions, three in the Branded Consumables segment
and one in the Consumer Solutions segment.
2005 Activity
On July 18, 2005, the Company completed the acquisition of The Holmes Group, Inc. (“Holmes” or the
“THG Acquisition”) for approximately $420 in cash and 6.15 million shares of the Company’s common stock.
Holmes is a leading manufacturer and distributor of select home environment and small kitchen electrics under
well-recognized consumer brands, including Bionaire®, Crock-Pot®, Holmes®, Patton®, Rival®, Seal-a-Meal®
and White Mountain®. The aggregate purchase price was approximately $680, including transaction expenses.
The cash portion of the THG Acquisition purchase price was financed via the issuance of an additional $380 of
term debt under the Senior Credit Facility discussed below (also see Note 9), cash on hand and revolver
borrowings.
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