Acquisitions | 6 Months Ended |
Jun. 30, 2014 |
Business Combinations [Abstract] | ' |
Acquisitions | ' |
Note 2. Acquisitions |
RFK Valjcici d. d. Konjic (“RFK”) |
On June 20, 2014, we acquired 79.2% of the outstanding shares of RFK Valjcici d. d. Konjic (“RFK”) for $9,756 in cash. RFK is a manufacturer of tapered rollers with operations in Konjic, Bosnia & Herzegovina. Its products, while complementary to NN’s existing roller bearing components, will broaden the Company’s product offering and allow penetration into adjacent markets. NN expects to acquire the remaining shares of RFK in the near future. In addition, we incurred fees from third parties as part of the purchase of $102, which were expensed as incurred in Selling, general and administrative expense within the Condensed Consolidated Statements of Comprehensive Income. The results of the operations of RFK have been consolidated with NN, Inc. since the date of acquisition. RFK has contributed revenues and net income of approximately $210 and $22, respectively, from the date of acquisition to June 30, 2014. |
RFK, a listed company on the Sarajevo Stock Exchange, was founded in 1984 and is expected to have sales of approximately $12.0 million in 2014. RFK currently exports all of its products, predominately to customers serving the European truck, industrial vehicle and railway markets. NN will continue operations at the existing facilities in Bosnia & Herzegovina and will roll up the operations under our Metal Bearing Components Segment. |
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The following table summarized the estimated fair values of assets acquired and liabilities assumed at the date of acquisition: |
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Assets acquired and liabilities assumed on June 20, 2014 | | | | | | | | | | | |
Current assets | | $ | 3,940 | | | | | | | | | |
Property, plant, and equipment | | | 7,684 | | | | | | | | | |
Intangible assets subject to amortization | | | 1,740 | | | | | | | | | |
Goodwill | | | 732 | | | | | | | | | |
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Total assets acquired | | $ | 14,096 | | | | | | | | | |
Current liabilities | | $ | 1,781 | | | | | | | | | |
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Total liabilities assumed | | $ | 1,781 | | | | | | | | | |
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Net asset acquired | | $ | 12,315 | | | | | | | | | |
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In addition, we have reported non-controlling interest of $2,559 for RFK representing the fair value of the 20.8% of the shares outstanding we do not own as of June 30, 2014. The accounting for the business combination is based on currently available information and is considered preliminary. We are in the process of finalizing fair market valuations of all the net assets acquired given the purchase was made very close to the end of the quarter. We expect this process to be complete during the third quarter of 2014 and plan to disclose the final allocation within our quarterly report on Form 10-Q for the third quarter of 2014. |
The intangible assets subject to amortization are for customer contracts and trade names totaling $1,740 and have a weighted average useful life of approximately 10 years. Goodwill of $732 arising from the acquisition is attributable primarily to the assembled workforce of the acquired business and strategic opportunities that are expected to arise from the acquisition of RFK. |
VS Assets Purchase |
On January 30, 2014, we purchased the majority of the operating assets of V-S Industries, V-S Precision, LLC and V-S Precision SA de DV (collectively referred to as “VS”) from the secured creditors of V-S Industries for $5,580 in cash and paid $1,840 for certain assumed liabilities. In addition, we incurred fees from third parties as part of the purchase of $716, which were expensed as incurred in Selling, general and administrative expense within the Condensed Consolidated Statements of Comprehensive Income. Finally, we incurred non-recurring costs directly related to the acquisition of $341 for integration. The results of the operations of VS have been consolidated with NN, Inc. since the date of acquisition. VS has contributed revenues and net loss of approximately $5,919 and $(950), including the integration costs, respectively, from the date of acquisition to June 30, 2014. |
VS is a precision metal components manufacturer that supplies customers in a variety of industries including electric motors, HVAC, power tools, automotive and medical. The acquisition of VS will provide us with a complementary, but broader product offering and will allow penetration into adjacent markets. VS has two locations in Wheeling, Illinois and Juarez, Mexico and will roll up under the Precision Metal Components Segment. |
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The following table summarized the fair values of assets acquired and liabilities assumed at the date of acquisition. We finalized the fair market valuations of all of the assets acquired and liabilities assumed at the acquisition date during the second quarter of 2014. The final allocation is disclosed below: |
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Assets acquired and liabilities assumed on January 30, 2014 | | March 31, | | | 2014 | | | June 30, | |
2014 | adjustments | 2014 |
| to fair value | |
Current assets | | $ | 1,263 | | | $ | 144 | | | $ | 1,407 | |
Property, plant, and equipment | | | 6,902 | | | | 164 | | | | 7,066 | |
Intangible assets subject to amortization | | | 75 | | | | — | | | | 75 | |
Goodwill | | | 244 | | | | (244 | ) | | | — | |
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Total assets acquired | | $ | 8,484 | | | $ | 64 | | | $ | 8,548 | |
Current liabilities | | $ | 2,904 | | | $ | 64 | | | $ | 2,968 | |
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Total liabilities assumed | | $ | 2,904 | | | $ | 64 | | | $ | 2,968 | |
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Net asset acquired | | $ | 5,580 | | | $ | — | | | $ | 5,580 | |
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