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Acquisition | 12 Months Ended
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Jun. 30, 2014
Acquisition |
Acquisition | 3. Acquisition Latrobe Specialty Metals, Inc. On February 29, 2012, the Company completed its acquisition of Latrobe Specialty Metals, Inc. (“Latrobe”) for a total purchase price of $427.0 million, net of cash acquired (the “Latrobe Acquisition”). The purchase price included the issuance of 8.1 million shares of the Company’s common stock to former Latrobe stockholders in exchange for their Latrobe capital stock and $11.5 million of cash paid at closing, net of cash acquired of $2.5 million, to satisfy certain costs of the sellers. The fair value of the shares issued as part of the consideration paid for Latrobe was determined based on the closing market price of the Company’s shares on the acquisition date. The Company also assumed $153.7 million of indebtedness which was paid off in cash concurrently with the closing of the acquisition. Latrobe manufactures and distributes high-performance specialty metals serving customers across end-use markets including the aerospace and defense, energy and industrial markets. The manufacturing operations of Latrobe are based principally in Latrobe, Pennsylvania. The following is a summary of the purchase price allocation in connection with the Latrobe Acquisition.
($ in millions) |  | Purchase Price Allocation |
Accounts receivable |  | $ | 67.0 |
Inventory |  | 242.6 |
Property, plant and equipment |  | 172.4 |
Intangible assets |  | 87.1 |
Other |  | 9.8 |
Accounts Payable and accrued liabilities |  | (64.1 | )
Long-term debt |  | (153.7 | )
Pension and other postretirement liabilities |  | (100.8 | )
Deferred income taxes |  | (45.0 | )
Total identifiable net assets |  | 215.3 |
Goodwill |  | 211.7 |
Total purchase price, net of cash acquired |  | $ | 427.0 |
The goodwill recognized in connection with the Latrobe Acquisition consists of the value associated with the immediate increase in the Company’s premium melt capacity to meet strong customer demand, improvements in the Company’s position in attractive end-use markets such as aerospace and defense and energy, the complementary asset capabilities which the Company expects will lead to enriched, higher margin product mix and operating cost synergies as well as the capabilities for commercialization of new Carpenter products under development. None of the goodwill recognized is deductible for income tax purposes. In connection with the Latrobe Acquisition, the Company incurred approximately $11.7 million of acquisition-related costs during the fiscal year ended June 30, 2012. These costs are included in the consolidated statements of income and represent incremental legal, accounting and investment banking fees incurred in connection with the transaction as well as approximately $5.2 million of liability for costs associated with the sale of certain Latrobe assets necessary to obtain approval for the transaction from the Federal Trade Commission (“FTC”). As part of the FTC approval, the Company entered into a consent decree to transfer assets and technical knowledge to Eramet S.A. and its subsidiaries, Aubert & Duval and Brown Europe, which will allow them to become a second manufacturer of two specific alloys in order to provide customers with a supply alternative in the marketplace. The consolidated net sales for the fiscal year ended June 30, 2012 includes approximately $163.2 million of net sales related to the Latrobe business since the Latrobe Acquisition. The Company’s operating income for the fiscal year ended June 30, 2012 includes approximately $10.5 million related to the operations of the Latrobe business since the Latrobe Acquisition, net of approximately $11.6 million recorded in connection with the fair value cost inventory adjustments. The unaudited pro forma results presented below include the effects of the Latrobe Acquisition as if it had occurred as of July 1, 2010. The unaudited pro forma results reflect certain adjustments related to the acquisition, such as the depreciation and amortization associated with estimates for the fair value of the property and equipment and acquired intangible assets and the impacts of the elimination of Latrobe debt that was repaid at closing. The supplemental proforma earnings were adjusted to exclude acquisition related costs in the fiscal year 2012 period.
($ in millions, except per share data) |  |  |  | Year Ended June 30, 2012 |
Revenue |  |  |  | $ | 2,339.6 |
Earnings |  |  |  | $ | 160.1 |
Earnings per Common Share |  |  |  |  |
Basic |  |  |  | $ | 3.04 |
Diluted |  |  |  | $ | 3.01 |
The pro forma results do not include any anticipated synergies or other expected benefits of the acquisition. Accordingly, the unaudited pro forma financial information above is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been completed on the dates indicated. Arwin Machining Plus, Ltd. On December 15, 2011, the Company acquired substantially all of the assets of Arwin Machining Plus, Ltd. (“Arwin”) for a cash purchase price of $1.4 million. The Arwin assets, consisting principally of machinery and equipment, have been integrated into the Canadian operations of Amega West Services (“Amega West”), a wholly owned subsidiary of the Company. The Company believes the acquisition enhances Amega West’s machining capabilities by adding the expertise and positions necessary to increase responsiveness to customers and to assist with the development of new directional drilling applications. The purchase price was allocated $0.7 million to machinery and equipment and $0.7 million to goodwill, most of which is deductible for tax purposes.

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