NOTE 18 – ACQUISITIONS

On August 27, 2018, we completed our acquisition (the “CSP Technologies Acquisition”) of all of the outstanding capital stock of CSP Technologies S.à r.l. (“CSP Technologies”). CSP Technologies is a leader in active packaging technology based on proprietary material science expertise for the pharma and food service markets. CSP Technologies operates two manufacturing locations in the U.S. and one in France. The purchase price was approximately $553.5 million and was funded by cash on hand. $5 million, which was held in restricted cash pending the finalization of a working capital adjustment, was released from restriction in January 2019 resulting in a refund of $964 thousand.

The following table summarizes the assets acquired and liabilities assumed as of the acquisition date at estimated fair value.


	August 27, 2018
Assets
Cash and equivalents	$	24,053
Accounts receivable		20,847
Inventories		42,169
Prepaid and other		3,995
Property, plant and equipment		99,194
Goodwill		278,020
Intangible assets		177,120
Other miscellaneous assets		1,039
Liabilities
Current maturities of long-term obligations		129
Accounts payable and accrued liabilities		31,989
Long-term obligations		6,037
Deferred income taxes		38,442
Retirement and deferred compensation plans		1,038
Deferred and other non-current liabilities		15,344
Net assets acquired	$	553,458

During the quarter ended March 31, 2019, we settled our $5 million working capital escrow account resulting in a reduction of our purchase price and the associated goodwill balance by $964 thousand.

The following table is a summary of the fair value estimates of the acquired identifiable intangible assets and weighted-average useful lives as of the acquisition date:


	Weighted-Average	Estimated
	Useful Life	Fair Value
	(in years)	of Asset
Acquired technology	12	$	46,700
Customer relationships	16		113,300
Trademarks and trade names	9		14,600
License agreements and other	11		2,520
Total		$	177,120

Goodwill, net of working capital settlement, in the amount of $277.1 million was recorded for the CSP Technologies Acquisition, of which $173.4 million and $103.7 million is included in the Pharma and Food + Beverage segments, respectively. Goodwill is calculated as the excess of the consideration transferred over the net assets acquired and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill largely consists of leveraging our commercial presence in selling the CSP Technologies line of products in markets where CSP Technologies did not previously operate and the ability of CSP Technologies to maintain its competitive advantage from a technical viewpoint. Goodwill will not be amortized, but will be tested for impairment at least annually. We do not expect any of the goodwill will be deductible for tax purposes.

The unaudited pro forma results presented below include the effects of the CSP Technologies Acquisition as if it had occurred as of January 1, 2017. The unaudited pro forma results reflect certain adjustments related to the acquisition, such as intangible asset amortization, fair value adjustments for inventory and financing costs related to the change in our debt structure. The pro forma results do not include any synergies or other expected benefits of the acquisition. Accordingly, the unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been completed on the date indicated.


Three Months Ended March 31,		2018

Net Sales	$	737,430
Net Income Attributable to AptarGroup Inc.		60,116
Net Income per common share — basic		0.97
Net Income per common share — diluted		0.93

On May 1, 2018, we acquired 100% of the common stock of Reboul, a French manufacturer specializing in stamping, decorating and assembling metal and plastic packaging for the cosmetics and luxury markets, for a purchase price of approximately $3.6 million (exclusive of $112 thousand of cash acquired) (the “Reboul Acquisition”). The results of Reboul’s operations have been included in the consolidated financial statements within our Beauty + Home segment since the date of acquisition.

In May 2018, we invested $10.0 million in preferred equity stock of Reciprocal Labs Corporation, doing business as Propeller Health, which was accounted for at cost. No impairment charges were recorded during 2018 or 2019 against this investment. During the fourth quarter of 2018, we recorded a gain of approximately $6.5 million by adjusting the carrying amount to its expected proceeds as this investment was ultimately sold during January 2019.