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Acquisitions | 12 Months Ended
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Oct. 31, 2017
Business Combinations [Abstract] |
Acquisitions | Note 4 — Acquisitions Business acquisitions have been accounted for using the acquisition method, with the acquired assets and liabilities recorded at estimated fair value on the dates of acquisition. The cost in excess of the net assets of the business acquired is included in goodwill. Operating results since the respective dates of acquisitions are included in the Consolidated Statement of Income. 2017 acquisitions On March 31, 2017, we completed the acquisition of Vention Medical’s Advanced Technologies business (“Vention”), a Salem, New Hampshire leading designer, developer and manufacturer of minimally invasive interventional delivery devices, catheters and advanced components for the global medical technology market. This is a highly complementary business that adds significant scale and enhances strategic capabilities of our existing medical platform. We acquired Vention for an aggregate purchase price of $705,000, net of $3,313 of cash and other closing adjustments of $10,726. The acquisition was funded primarily through a new term loan facility, as well as through cash and borrowings on our credit facility. The purchase price was allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. We determined the estimated fair values based on independent appraisals, discounted cash flow analyses, quoted market prices, replacement cost analyses and estimates made by management. Based on the fair value of the assets acquired and the liabilities assumed, we recordedidentifiable intangible assets of $286,000 consisting primarily of $240,000 of customer relationships (amortized over 14 years), $2,000 of tradenames (amortized over 6 years), and $44,000 of technology, consisting of $36,000 (amortized over 14 years) and $8,000 (amortized over 10 years). The fair value of the identifiable intangible assets were estimated by applying income and market approaches. The fair value measurement is based on significant inputs that are not observable in the market and thus represents a fair value measurement categorized within Level 3 of the fair value hierarchy with various assumptions about growth rates and margins, discount rates, and financial multiples of entities considered to be similar to Vention. As a result of the acquisition, we recognized $434,625 of goodwill, of which $37,200 is tax deductible. Goodwill represents the value we expect to achieve through the expansion of our existing medical platform. This acquisition is being reported in our Advanced Technology Systems segment. As of October 31, 2017, the purchase price allocations are considered preliminary as we complete our assessments of income taxes. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date:
Assets acquired: |  |  |  |
Cash |  | $ | 3,313 |
Receivables |  |  | 26,742 |
Inventories |  |  | 14,279 |
Prepaid expenses |  |  | 3,079 |
Property, plant and equipment |  |  | 34,319 |
Goodwill |  |  | 434,625 |
Intangible assets |  |  | 286,000 |
Other assets |  |  | 343 |
Total assets acquired |  | $ | 802,700 |
Liabilities assumed: |  |  |  |
Current liabilities |  |  | 19,130 |
Deferred tax liabilities |  |  | 64,531 |
Total liabilities assumed |  | $ | 83,661 |
Net assets acquired |  | $ | 719,039 |
The transaction was accounted for under the acquisition method of accounting and, accordingly, the results of Vention’s operations, including $94,515 in sales and net income of $7,820, are included in our Consolidated Statements of Income from the date of acquisition. As of October 31, 2017, we incurred $14,671 of corporate charges related to Vention acquisition transaction costs which have been included within selling and administrative expenses in our Consolidated Statements of Income. The following unaudited pro forma financial information for 2017 and 2016 assumes the Vention acquisition occurred as of the beginning of 2016 and is based on our historical financial statements and those of Vention. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results of operations which may occur in the future or that would have occurred had the acquisition of Vention been effected on the date indicated, nor are they necessarily indicative of our future results of operations.
|  | Twelve Months Ended |
|  | October 31, 2017 |  |  | October 31, 2016 |
Sales |  | $ | 2,132,417 |  |  | $ | 1,939,525 |
Net income |  |  | 294,891 |  |  |  | 260,991 |
Diluted earnings per share |  |  | 5.07 |  |  |  | 4.54 |
The most significant pro forma adjustments included within the unaudited pro forma financial information presented in the table above relate to acquisition transaction costs, amortization of intangible assets, depreciation of property, plant and equipment, charges related to the fair value adjustment of acquisition-date inventory and interest expense associated with the new term loan facility. Also on March 31, 2017, we entered into a $705,000 term loan facility with a group of banks. The Term Loan Agreement provides for the following term loans in three tranches: $200,000 due in October 2018, $200,000 due in March 2020, and $305,000 due in March 2022. The weighted average interest rate for borrowings under this agreement was 2.33% at October 31, 2017. Borrowings under this agreement were used for the single purpose of acquiring Vention. We were in compliance with all covenants at October 31, 2017. Pro forma sales and results of operations for the following 2017, 2016 and 2015 acquisitions, had they occurred at the beginning of the applicable fiscal year ended October 31, are not material and, accordingly, are not provided. On February 16, 2017, we purchased 100 percent of the outstanding shares of InterSelect GmbH (“InterSelect”), a German designer and manufacturer of selective soldering systems used in a variety of automotive, aerospace and industrial electronics assembly applications. We acquired InterSelect for an aggregate purchase price of $5,432, net of cash acquired of $492. Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $3,548 and identifiable intangible assets of $1,879 were recorded. The identifiable intangible assets consist primarily of $1,109 of customer relationships (amortized over 9 years), $348 of tradenames (amortized over 12 years), and $422 of technology (amortized over 9 years). Goodwill associated with this acquisition is not tax deductible. This acquisition is being reported in our Advanced Technology Systems segment. On February 1, 2017, we purchased 100 percent of the outstanding shares of Plas-Pak Industries, Inc. (“Plas-Pak”), a Norwich, Connecticut designer and manufacturer of injection molded, single-use plastic dispensing products. Plas-Pak’s broad product offering includes two-component (2K) cartridges for industrial and commercial do-it-yourself adhesives, dial-a-dose calibrated syringes for veterinary and animal health applications, and specialty syringes for pesticide, dental and other markets. We acquired Plas-Pak for an aggregate purchase price of $70,798, net of cash acquired of $543. Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $24,995 and identifiable intangible assets of $33,800 were recorded. The identifiable intangible assets consist primarily of $23,700 of customer relationships (amortized over 17 years), $4,100 of tradenames (amortized over 12 years), $5,000 of technology (amortized over 9 years) and $1,000 of non-compete agreements (amortized over 5 years). Goodwill associated with this acquisition is tax deductible. This acquisition is being reported in our Advanced Technology Systems segment. On January 3, 2017, we purchased certain assets of ACE Production Technologies, Inc. (“ACE”), a Spokane, Washington based designer and manufacturer of selective soldering systems used in a variety of automotive and industrial electronics assembly applications. We acquired the assets for an aggregate purchase price of $13,761. Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $6,383 and identifiable intangible assets of $5,010 were recorded. The identifiable intangible assets consist primarily of $2,800 of customer relationships (amortized over 7 years), $1,000 of tradenames (amortized over 11 years), $1,100 of technology (amortized over 7 years) and $110 of non-compete agreements (amortized over 3 years). Goodwill associated with this acquisition is tax deductible. This acquisition is being reported in our Advanced Technology Systems segment. 2016 acquisition On September 1, 2016, we purchased 100 percent of the outstanding shares of LinkTech Quick Couplings, Inc. (“LinkTech”), a Ventura, California designer, manufacturer and distributor of highly engineered precision couplings and fittings. We acquired LinkTech for an aggregate purchase price of $43,348, net of cash acquired of $36. Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $25,867 and identifiable intangible assets of $14,610 were recorded. The identifiable intangible assets consist primarily of $8,600 of customer relationships (amortized over 11 years), $2,800 of tradenames (amortized over 12 years), $2,300 of technology (amortized over 8 years) and $910 of non-compete agreements (amortized over 5 years). Goodwill associated with this acquisition is tax deductible. This acquisition is being reported in our Advanced Technology Systems segment. 2015 acquisitions On June 15, 2015, we purchased 100 percent of the outstanding shares of Liquidyn, a German based manufacturer of micro dispensing systems, including micro dispensing pneumatic valves, controllers, and process equipment used in the electronics, automobile, medical, packaging, furniture and aerospace markets. We acquired Liquidyn for an aggregate purchase price of $14,565, net of cash acquired of $657. Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $10,487 and identifiable intangible assets of $3,991 were recorded. The identifiable intangible assets consist primarily of $1,285 of customer relationships (amortized over 6 years), $1,049 of tradenames (amortized over 11 years), $1,421 of technology (amortized over 5 years) and $236 of non-compete agreements (amortized over 2 years). Goodwill associated with this acquisition is not tax deductible. This acquisition is being reported in our Advanced Technology Systems segment. On August 3, 2015, we purchased 100 percent of the outstanding shares of WAFO, a German based manufacturer and refurbisher of screws and barrels for the synthetic material and rubber industries. We acquired WAFO for an aggregate purchase price of $7,429, net of cash acquired of $236. Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $3,463 and identifiable intangible assets of $1,708 were recorded. The identifiable intangible assets consist of $635 of customer relationships (amortized over 5 years), $679 of tradenames (amortized over 10 years), $142 of technology (amortized over 3 years) and $252 of non-compete agreements (amortized over 3 years). Goodwill associated with this acquisition is not tax deductible. This acquisition is being reported in our Adhesive Dispensing Systems segment. On September 1, 2015, we purchased 100 percent of the outstanding shares of MatriX, a German based developer of automated in-line and off-line x-ray tools and solutions used for inspection applications. We acquired MatriX for an aggregate purchase price of $53,759, net of cash acquired of $966 and debt assumed of $481. Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $32,439 and identifiable intangible assets of $16,382 were recorded. The identifiable intangible assets consist of $6,485 of customer relationships (amortized over 8 years), $4,046 of tradenames (amortized over 11 years), $5,328 of technology (amortized over 6 years) and $523 of non-compete agreements (amortized over 3 years). Goodwill associated with this acquisition is not tax deductible. This acquisition is being reported in our Advanced Technology Systems segment.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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