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Acquisitions | 3 Months Ended
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Mar. 31, 2017
Business Combinations [Abstract] |
Acquisitions | Acquisitions Acquisition of Senscient, Inc. On September 19, 2016, we acquired 100% of the common stock of Senscient, Inc. ("Senscient") for $19.1 million in cash. There is no contingent consideration. Senscient, which is headquartered in the UK, is a leader in laser-based gas detection technology. The acquisition of Senscient expands and enhances MSA’s technology offerings in the global market for fixed gas and flame detection systems, as the Company continues to execute its core product growth strategy. The acquisition was funded through borrowings on our unsecured senior revolving credit facility. The following table summarizes the preliminary fair values of the Senscient assets acquired and liabilities assumed at the date of acquisition:
(In millions) | September 19, 2016
Current assets (including cash of $0.7 million) | $ | 5.9 |
Property, plant and equipment and other noncurrent assets | 0.3 |
Acquired technology | 1.6 |
Customer-related intangibles | 2.8 |
Goodwill | 10.5 |
Total assets acquired | 21.1 |
Total liabilities assumed | 2.0 |
Net assets acquired | $ | 19.1 |
The amounts in the table above are subject to change as we complete our valuation of the assets acquired and liabilities assumed. This valuation is expected to be completed by mid-2017. Assets acquired and liabilities assumed in connection with the acquisition have been recorded at their fair values. Fair values were determined by management, based, in part on an independent valuation performed by a third party valuation specialist. The valuation methods used to determine the fair value of intangible assets included the relief from royalty method for the technology related intangible assets and the cost method for assembled workforce which is included in goodwill. A number of significant assumptions and estimates were involved in the application of these valuation methods, including sales volumes and prices, costs to produce, tax rates, capital spending, discount rates, and working capital changes. Cash flow forecasts were generally based on pre-acquisition forecasts coupled with estimated MSA sales synergies. Identifiable intangible assets with finite lives are subject to amortization over their estimated useful lives, which are ten and five years for the technology and customer-related intangibles, respectively. Estimated future amortization expense related to identifiable intangible assets is approximately $0.5 million for the remaining portion of 2017 and $0.7 million each year from 2018 through 2021. Goodwill is calculated as the excess of the purchase price over the fair value of net assets acquired and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Among the factors that contributed to a purchase price in excess of the fair value of the net tangible and intangible assets acquired were the acquisition of an assembled workforce, the expected synergies and other benefits that we believe will result from combining the operations of Senscient with our operations. Goodwill of $10.5 million related to the Senscient acquisition is included in the International operating segment and is deductible for tax purposes. Our results for the three months ended March 31, 2017, include transaction and integration costs of $0.3 million related to the Senscient acquisition. These costs are all reported in selling, general and administrative expenses. The operating results of Senscient have been included in our consolidated financial statements from the acquisition date. The following unaudited pro forma information presents our combined results as if the Senscient acquisition had occurred at the beginning of 2016. The unaudited pro forma financial information was prepared to give effect to events that are (1) directly attributable to the acquisition; (2) factually supportable; and (3) expected to have a continuing impact on the combined company’s results. There were no material transactions between MSA and Senscient during the periods presented that are required to be eliminated. Intercompany transactions between Senscient companies during the periods presented have been eliminated in the unaudited pro forma condensed combined financial information. The unaudited pro forma financial information does not reflect any cost savings, operating synergies or revenue enhancements that the combined companies may achieve as a result of the acquisitions or the costs to integrate the operations or the costs necessary to achieve cost savings, operating synergies or revenue enhancements. Pro forma financial information (Unaudited)
| Three Months Ended March 31,
(In millions, except per share amounts) | 2016
Net sales | $ | 279.5 |
Income from continuing operations | 11.7 |
Basic earnings per share from continuing operations | 0.31 |
Diluted earnings per share from continuing operations | 0.31 |
The unaudited pro forma condensed combined financial information is presented for information purposes only and is not intended to represent or be indicative of the combined results of operations or financial position that we would have reported had the acquisition been completed as of the date and for the period presented, and should not be taken as representative of our consolidated results of operations or financial condition following the acquisition. In addition, the unaudited proforma condensed combined financial information is not intended to project the future financial position or results of operations of the combined company.

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