Business Acquisitions | 3 Months Ended |
Nov. 30, 2014 |
BUSINESS ACQUISITIONS [Abstract] | |
Business Combination Disclosure [Text Block] | BUSINESS ACQUISITIONS |
Specialty Plastics Business of Ferro Corporation |
On July 1, 2014, the Company acquired the majority of the assets of the specialty plastics business of Ferro Corporation(“Specialty Plastics” acquisition) for $91.0 million. The results of operations for this business have been included in the consolidated financial statements since the date of acquisition. |
The acquisition strategically expands the Company's geographic reach with multiple facilities located in the U.S. and one facility located in Spain, diversifies the Company's product mix and strengthens its position in a broad range of attractive product markets. Additionally, the business offers a broad portfolio of proprietary products and recognized brand names serving a wide range of end markets including packaging, transportation, construction, appliances and agriculture. |
The information included herein has been prepared based on the preliminary allocation of the purchase price using estimates of the fair value and useful lives of assets acquired and liabilities assumed which were determined with the assistance of independent valuations using discounted cash flow and comparative market multiple approaches, quoted market prices and estimates made by management. The purchase price allocation is subject to further adjustment until all pertinent information regarding the acquired accounts receivable, inventory, intangible assets, property, plant & equipment, other current and long-term liabilities, and deferred income tax assets and liabilities are fully evaluated by the Company. |
The following table presents the preliminary estimated fair value of the assets acquired and liabilities assumed from the Specialty Plastics acquisition at the date of acquisition: |
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| | As of July 1, 2014 | |
| | (In thousands) | |
Accounts receivable | | $ | 27,850 | | |
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Inventories | | 12,800 | | |
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Prepaid expenses and other current assets | | 415 | | |
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Property, plant and equipment | | 20,049 | | |
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Intangible assets | | 26,985 | | |
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Total assets acquired | | $ | 88,099 | | |
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Accounts payable | | 15,247 | | |
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Accrued payroll, taxes and related benefits | | 1,552 | | |
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Other accrued liabilities | | 706 | | |
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Other long-term liabilities | | 181 | | |
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Total liabilities assumed | | $ | 17,686 | | |
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Identifiable net assets acquired | | $ | 70,413 | | |
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Goodwill | | 20,587 | | |
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Net assets acquired | | $ | 91,000 | | |
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The Company preliminarily recorded acquired intangible assets of $27.0 million, all of which are customer related intangibles with an estimated weighted-average useful life of 13.6 years. In addition, the estimated fair value of accounts receivable acquired was $27.9 million with the gross contractual amount being $28.0 million. |
Goodwill is calculated as the excess of the purchase price over the estimated fair values of the assets acquired and the liabilities assumed in the acquisition, and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The amount allocated to goodwill associated with the Specialty Plastics acquisition is primarily the result of anticipated synergies and market expansion. |
The following pro forma information represents the consolidated results of the Company as if the Specialty Plastics acquisition occurred as of September 1, 2013: |
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| | Three months ended November 30, | |
| | 2013 | |
| | Unaudited | |
| | (In thousands, except per share data) | |
Net sales | | $ | 624,872 | | |
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Net income attributable to A. Schulman, Inc. | | $ | 16,075 | | |
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Net income per share of common stock attributable to A. Schulman, Inc. - diluted | | $ | 0.55 | | |
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The following table summarizes the Company's other business acquisitions for the periods presented: |
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Transaction Description | Date of Transaction | | Purchase | | Segment |
Consideration |
(In millions) |
Perrite Group | 2-Sep-13 | | $51.30 | | EMEA and APAC |
A thermoplastics manufacturer with business in niche engineered plastics and custom color with operations in Malaysia, the United Kingdom and France | | | | | |
Network Polymers, Inc. | 2-Dec-13 | | $49.20 | | Americas |
An Ohio niche engineered plastics compounding business that is a leading single source provider of thermoplastic resins and alloys | | | | | |
Prime Colorants | 31-Dec-13 | | $15.10 | | Americas |
A Tennessee manufacturer of custom color and additive concentrates | | | | | |
Compco Pty. Ltd. | 2-Sep-14 | | $6.70 | | APAC |
A manufacturer of masterbatches and custom color with operations in Australia | | | | | |
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The Company incurred $1.1 million and $0.6 million of acquisition and integration related costs, primarily included in selling, general & administrative expenses, during the three months ended November 30, 2014 and 2013, respectively. |