Sunbeam 2009 Annual Report Download - page 52

Notes to Consolidated Financial Statements
Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated)
3. Acquisitions and Pending Acquisitions
2009 Activity
During 2009, the Company completed three tuck-in acquisitions that by nature are complementary to the Company’s core
businesses and from an accounting standpoint were not significant. The Company did not complete any acquisitions in 2008.
2007 Activity
On April 6, 2007, the Company acquired Pure Fishing, a leading global provider of fishing tackle marketed under well-known fishing
brands including Abu-Garcia®, Berkley®, Gulp!®, Mitchell®, Stren®and Trilene®. The consideration consisted of $300 in cash, a $100 five-
year subordinated note (the “Note”) with a 2% coupon and a warrant exercisable into approximately 2.2 million shares of Jarden common
stock with an initial exercise price of $45.32 per share (subject to adjustment as provided therein). In addition to the upfront purchase price,
the Company has paid $25 and accrued $25 of contingent purchase price payments that are based on the future financial performance of
the acquired business. The accrued contingent purchase price payment is expected to be paid in 2010. The Company’s results of operations
for 2007 include the results of Pure Fishing from April 6, 2007.
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 of $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. In connection with the K2 acquisition, the Company repaid certain of K2’s debt, including accrued interest and make-
whole premiums for approximately $341. The Company’s results of operations for 2007 include the results of K2 from August 8, 2007.
Pending Acquisition
On December 16, 2009, we entered into a letter agreement (the “Offer Letter”) with Total S.A. (“Total”), pursuant to which we made an
irrevocable and binding offer to enter into a Share Purchase Agreement (the “SPA”) with Total for the purchase of Total’s Mapa Spontex Baby
Care and Home Care businesses (“Mapa Spontex”), through the acquisition of certain of Total’s subsidiaries (the “Acquired Companies”) for a
Euro purchase price of €335 (approximately $500) in cash, less any indebtedness assumed, subject to certain adjustments (the “Acquisition”).
Mapa Spontex is a global manufacturer and distributor of primarily baby care and home care products with leading market positions in
Europe, Brazil and Argentina in the core categories it serves. Its baby care portfolio includes teats, soothers, feeding bottles and other infant
accessories sold primarily under the NUK®, Tigex®, Lillo®, Fiona®and First Essentials®brands; and health care products, including condoms
sold under the Billy Boy brand. Its home care portfolio includes sponges, rubber gloves and related cleaning products for retail, professional
and industrial uses sold primarily under the Mapa®and Spontex®brands. Our obligation to enter into the SPA is subject to Total’s accept-
ance of our offer. Under French law, Total is not permitted to accept our offer or to enter into the binding SPA to sell the Acquired
Companies until mandatory information and consultation procedures have been completed with certain workers’ representative bodies.
The Acquisition is expected to expand the Company’s product offerings and distribution channels into new, attractive categories and further
diversify revenue streams and increase the Company’s international presence. The Acquisition is consistent with the Company’s strategy of
purchasing leading, niche consumer-oriented brands with attractive cash flows and strong management. The Mapa Spontex business is
expected to be included in the Company’s Branded Consumables segment from the acquisition date. The transaction is expected to close
early in the second quarter of 2010, subject to receipt of regulatory approvals, completion of required employee consultation procedures
and other customary closing conditions. No assurances can be given that the Acquisition will be consummated or, if such Acquisition is
consummated, as to the final terms of such Acquisition.
4. Inventories
Inventories are stated at the lower-of-cost-or-market with cost being determined principally by the first-in, first-out method (“FIFO”),
and are comprised of the following at December 31, 2009 and 2008:
(In millions) 2009 2008
Raw materials and supplies $ 190.5 $ 214.8
Work-in-process 64.6 54.5
Finished goods 719.0 911.1
Total inventories $ 974.1 $ 1,180.4
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