Pramac

Acquisition

March 1, 2016,

the Company acquired a

65%

ownership interest in Pramac for a purchase price, net of cash

acquired, of

$60,250.

Headquartered in Siena, Italy, Pramac is a leading global manufacturer of stationary, mobile and portable generators primarily sold under the Pramac® brand. Pramac products are sold in over

150

countries through a broad distribution network. The acquisition purchase price was funded solely through cash on hand.

The

35%

noncontrolling interest in

Pramac had an acquisition date fair value of

$34,253,

and was recorded as a redeemable noncontrolling interest in the condensed consolidated balance sheet, as the noncontrolling interest holder has within its control the right to require the Company to redeem its interest in Pramac. The noncontrolling interest holder has a put option to sell their interests to the Company any time within

five

years from the date of acquisition. The put option price is either (i) a fixed amount if voluntarily exercised within the

first

two

years after the acquisition, or (ii) based on a multiple of earnings, subject to the terms of the acquisition. Additionally, the Company holds a call option that it

may

redeem commencing

five

years from the date of acquisition, or earlier upon the occurrence of certain circumstances. The call option price is based on a multiple of earnings that is subject to the terms of the acquisition. Both the put and call option only provide for the complete transfer of the noncontrolling interest, with

partial transfers of interest permitted.

The redeemable noncontrolling interest is recorded at the greater of the initial fair value, increased or decreased for the noncontrolling interests

’ share of comprehensive income (loss), or the estimated redemption value, with any adjustments to the redemption value impacting retained earnings, but

not

net income. However, the redemption value adjustments are reflected in the earnings per share calculation, as detailed in Note

11,

“Earnings Per Share,” to the condensed consolidated financial statements. The following table presents the changes in the redeemable noncontrolling interest:

	Three Months Ended June 30,					Six Months Ended June 30,
	2017			2016		2017			2016
Balance at beginning of period	$	33,566		$	35,047	$	33,138		$	-
Noncontrolling interest of Pramac		-			-		-			34,253
Net income		92			151		210			167
Foreign currency translation		4,433			487		5,357			1,265
Redemption value adjustment		(295	)		-		(909	)		-
Balance at end of period	$	37,796		$	35,685	$	37,796		$	35,685

The Company

finalized the Pramac purchase price allocation during the

first

quarter of

2017,

based upon its estimates of the fair value of the acquired assets and assumed liabilities. The final purchase price allocation as of the balance sheet date was as follows:

	March 1, 2016

Accounts receivable, net	$	50,716
Inventories		39,889
Property and equipment, net		19,138
Intangible assets		34,471
Goodwill		46,775
Other assets		7,698
Total assets acquired		198,687

Short-term borrowings		21,741
Accounts payable		40,270
Long-term debt and capital lease obligations (including current portion)		18,599
Other liabilities		23,521
Redeemable noncontrolling interest		34,253
Noncontrolling interest		53
Net assets acquired	$	60,250

The goodwill ascribed to this acquisition is

not

deductible for tax purposes.

The accompanying condensed consolidated financial statements include the results of Pramac from the date of acquisition through

June 30, 2017.

The following unaudited pro forma information of t

he Company gives effect to this acquisition as though the transaction had occurred on

January 1, 2016.

Consolidated net sales on a pro forma basis for the

three

and

six

month periods ended

June 30, 2016

were

$367,376

and

$683,258,

respectively. The pro forma impact of this acquisition on net income and earnings per share for both the

three

and

six

month periods ended

June 30, 2016

not

significant due to amortization related to acquired intangible assets and the fair value step-up of inventory in purchase accounting. This unaudited 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 acquisition been consummated on

January 1, 2016.