Quarterly report pursuant to Section 13 or 15(d)

Business Acquisitions

v2.4.0.8
Business Acquisitions
 3 Months Ended
Dec. 31, 2013
Business Acquisitions  
Business Acquisitions

3.              Business Acquisitions

 

We completed the acquisition of Coperion on December 1, 2012, in a transaction valued at $545.0.  The aggregate purchase consideration consisted of $269.1 of cash, net of cash acquired, and the assumption of $146.0 of debt and $129.9 of pension liabilities.  We utilized $426.3 of borrowings under our revolving credit facility and cash on hand to finance the acquisition, including the repayment of $146.0 of debt outstanding under Coperion’s prior financing arrangements.

 

This acquisition was the largest in the Company’s history and represented an important step in the execution of our strategic plans to further diversify Hillenbrand and accelerate the growth of the Process Equipment Group.  The integration of Coperion with the Process Equipment Group will continue to be a key initiative for the near term.  Combining our product offerings to provide a more complete system solution is our highest priority from an integration perspective.  In addition, we believe leveraging Coperion’s global infrastructure will enable the existing businesses within the Process Equipment Group to enter new global markets more quickly.  We also expect the Process Equipment Group’s existing strong U.S. sales network will enhance Coperion’s expansion in North America.  Finally, the application of the Company’s Lean tools and other core competencies to Coperion’s operations is expected to contribute to improved margins and increased customer satisfaction.

 

The following table summarizes fair values of the assets acquired and liabilities assumed for the Coperion acquisition:

 

 

 

December 1,
2012

 

Cash and cash equivalents

 

$

32.8

 

Inventory

 

112.4

 

Current assets, excluding cash and cash equivalents and inventory

 

175.2

 

Property, plant, and equipment

 

54.4

 

Identifiable intangible assets

 

291.8

 

Goodwill

 

275.1

 

Other assets

 

2.1

 

Total assets acquired

 

943.8

 

 

 

 

 

Current liabilities

 

282.5

 

Accrued pension obligations

 

129.9

 

Deferred income taxes

 

68.6

 

Other long-term liabilities

 

6.7

 

Total liabilities assumed

 

487.7

 

 

 

 

 

Noncontrolling interests

 

8.2

 

 

 

 

 

Aggregate purchase price

 

$

447.9

 

 

Final purchase accounting adjustments were made during the first quarter of fiscal 2014 that increased goodwill ($7.3) and the accrued pension obligations ($4.3) based on finalization of the actuarial analysis for Coperion’s defined benefit plans.  In addition, adjustments were made to current liabilities ($1.3) and the noncontrolling interests ($1.7) based on final valuation adjustments.  The remaining change in consolidated goodwill during the first quarter of fiscal 2014 was related to change in foreign currency.

 

Set forth below is unaudited pro forma information for the first quarter of fiscal 2013.  It excludes acquisition costs ($8.2) and backlog amortization and inventory step-up costs ($6.8).  The unaudited pro forma information is presented for informational purposes only and does not necessarily reflect the results of operations that would actually have been achieved.

 

 

 

Three Months
Ended
December 31,

 

 

 

2012

 

Pro forma net revenue

 

$

420.4

 

Pro forma net income(1)

 

28.3

 

Pro forma basic and diluted earnings per share

 

$

0.46

 

 

(1)Pro forma net income attributable to Hillenbrand

 

We incurred $8.2 of net business acquisition costs associated with acquisitions during the first quarter of fiscal 2013.  These costs consisted of $9.0 of operating expenses, partially offset by $0.8 of other income (see Note 12).