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3. Business Acquisitions
Over the past two years we completed two significant business acquisitions in alignment with our long-term value creation strategy. We completed the acquisition of K-Tron on April 1, 2010, for an aggregate purchase price of $435.2. This resulted in a net cash purchase price of $369.0 when adjusted for cash acquired and debt assumed. We utilized $375.0 of borrowings under our revolving credit facility and cash on hand to finance the acquisition. We completed the final purchase price allocation as of April 1, 2011, which reduced goodwill and adjusted net deferred taxes and other liabilities by $4.8. We believe the acquisition of K-Tron provides several compelling benefits to us, including: attractive product, industry, and customer diversification; a sizable new global platform within the bulk solids material handling industry; preservation of our high quality of earnings and cash flows; improvement of our growth potential; meaningful opportunities to improve K-Trons financial performance through the application of lean business; and a strong cultural fit for us with a proven management team.
We completed the acquisition of Rotex on August 31, 2011, for a purchase price of $240.0 plus a preliminary closing cash estimate of $8.1. This resulted in a cash purchase price of $240.4 when adjusted for cash acquired. We utilized $159.0 of borrowings under our revolving credit facility and cash on hand to finance the acquisition. We believe that the acquisition of Rotex will complement the Process Equipment Group platform that began with the K-Tron acquisition, while giving us additional reach into new high-growth applications and geographies.
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for the Rotex and K-Tron acquisitions discussed above:
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Rotex
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K-Tron
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August 31, 2011
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April 1, 2010
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Cash and cash equivalents
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$
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7.7
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$
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66.2
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Current assets, excluding cash and cash equivalents
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28.0
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67.2
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Property, plant, and equipment
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8.8
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30.0
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Identifiable intangible assets
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118.8
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218.7
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Goodwill
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102.7
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185.8
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Other noncurrent assets
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4.7
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Total assets acquired
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266.0
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572.6
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Current liabilities
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16.4
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48.1
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Debt
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|
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7.0
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Deferred income taxes
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81.9
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Other long-term liabilities
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1.5
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0.4
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Total liabilities assumed
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17.9
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137.4
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Aggregate purchase price
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$
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248.1
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$
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435.2
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Amounts assigned to identifiable intangible assets are being amortized on a straight-line basis over their estimated useful lives. The amounts assigned at the time of each acquisition and their useful lives were:
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Rotex
Fair Values
August 31, 2011
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K-Tron
Fair Values
April 1, 2010
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Estimated
Useful Lives (years)
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Trade names
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$
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26.0
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$
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50.6
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Indefinite
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Customer relationships
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82.1
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150.3
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17 - 21
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Technology, including patents
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7.4
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16.1
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5-10
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Backlog
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3.3
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1.7
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< 1
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Total identifiable intangible assets
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$
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118.8
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$
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218.7
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The unaudited pro forma information for the periods set forth below gives effect to the Rotex and K-Tron acquisitions as if they had occurred at the beginning of the annual periods presented. It includes adjustments for additional interest expense, depreciation, and amortization, and excludes business acquisition costs and the effects of fair value adjustments to inventory and backlog. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisitions been consummated as of that time.
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Fiscal Year Ended
September 30,
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2011
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2010
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Pro forma net revenue
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$
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982.4
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$
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821.7
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Pro forma net income
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117.0
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100.2
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Pro forma diluted earnings per share
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1.89
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1.62
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We incurred $6.3 and $10.5 of business acquisition costs associated with these acquisitions in the years ended September 30, 2011 and 2010.
Other Acquisitions
Batesville completed two acquisitions in fiscal 2010 with an aggregate purchase price of $3.0. The acquisitions consisted of primarily intangible assets.
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