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BUSINESS ACQUISITION | 9 Months Ended
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Sep. 26, 2021
Business Combination and Asset Acquisition [Abstract] |
BUSINESS ACQUISITION | BUSINESS ACQUISITION Kerry Consumer Foods' Meats and Meals On September 24, 2021, the Company acquired 100% of the equity of the Kerry Consumer Foods' Meats and Meals businesses for cash of £695.3 million, or $954.1 million, subject to customary working capital adjustments. The acquisition was funded with the Company's recent senior notes offering and borrowings under the credit facility. The acquisition solidifies Pilgrim's as a leading European food company. The Specialty Meats business is a leading manufacturer of branded and private label meats, meat snacks and food-to-go products in the U.K. and Ireland. The Ready Meals business is a leading ethnic chilled and frozen ready meals business in the U.K. The acquired operations are included in the Company's U.K. and Europe reportable segment. Kerry Consumer Foods' Meats and Meals businesses operations for the period from September 24, 2021 through September 26, 2021 were insignificant. Transaction costs incurred in conjunction with the acquisition were approximately $9.3 million for the nine months ended September 26, 2021. These costs were expensed as incurred and are reflected within Selling, general and administrative expense in the Company's Consolidated Statements of Income. The assets acquired and liabilities assumed in the acquisition were measured at their values as of September 24, 2021 as set forth below. The excess of the purchase price over the preliminary fair value of the net intangible assets and identifiable assets was recorded as goodwill in the Company's U.K. and Europe reportable segment. The factors contributing to the recognition of the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the acquisition as well the assembled workforce. Benefits include (1) complementary product offerings, (2) an enhanced footprint in the U.K. and Ireland and (3) an enhanced position in the fast-growing plant-based protein, direct-to-consumer and hot food-to-go markets. The goodwill is not expected to be tax deductible for tax purposes. The fair values of the assets acquired and liabilities assumed are preliminary and we are currently completing our fair value assessment with the assistance of third-party valuation specialists. Any adjustments identified in the measurement period, which will not exceed one year from the acquisition date, will be accounted for prospectively. The preliminary fair values recorded for the assets acquired and liabilities assumed for the acquisition are as follows (in thousands):
| Preliminary
Cash and cash equivalents | $ | 113 |
Trade accounts and other receivables | 7,386 |
Inventories | 60,339 |
Prepaid expenses and other current assets | 7,953 |
Operating lease assets | 14,967 |
Property, plant and equipment | 170,617 |
Identified intangible assets | 453,068 |
Total assets acquired | 714,443 |
Accounts payable | 8,016 |
Other current liabilities | 9,568 |
Operating lease liabilities | 13,405 |
Deferred tax liabilities | 97,040 |
Other long-term liabilities | 2,591 |
Total liabilities assumed | 130,620 |
Total identifiable net assets | 583,823 |
Goodwill | 370,237 |
Total consideration transferred | $ | 954,060 |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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