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ACQUISITIONS | 3 Months Ended
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Jun. 30, 2018
Business Combinations [Abstract] |
ACQUISITIONS | ACQUISITIONS Williamson-Dickie On October 2, 2017, VF acquired 100% of the outstanding shares of Williamson-Dickie Mfg. Co. (“Williamson-Dickie”) for $800.7 million in cash, subject to working capital and other adjustments. The purchase price was primarily funded with short-term borrowings. During the three months ended March 2018, the purchase consideration was reduced by $2.3 million associated with the final working capital adjustment, resulting in a revised purchase price of $798.4 million. Williamson-Dickie was a privately held company based in Ft. Worth, Texas, and was one of the largest companies in the workwear sector with a portfolio of brands including Dickies®, Workrite®, Kodiak®, Terra® and Walls®. The acquisition of Williamson-Dickie brings together complementary assets and capabilities, and creates a workwear business that will now serve an even broader set of consumers and industries around the world. For the three months ended June 2018, Williamson-Dickie contributed revenues of $219.1 million and net income of $14.8 million, including restructuring charges. The allocation of the purchase price is preliminary and subject to change for certain income tax matters. Accordingly, adjustments may be made to the values of the assets acquired and liabilities assumed as additional information is obtained about the facts and circumstances that existed at the acquisition date. The following table summarizes the estimated fair values of the Williamson-Dickie assets acquired and liabilities assumed at the date of acquisition:
(In thousands) |  | October 2, 2017 |
Cash and equivalents |  | $ | 60,172 |  |
Accounts receivable |  | 146,403 |  |
Inventories |  | 251,778 |  |
Other current assets |  | 8,447 |  |
Property, plant and equipment |  | 105,119 |  |
Intangible assets |  | 397,755 |  |
Other assets |  | 9,665 |  |
Total assets acquired |  | 979,339 |  |
Short-term borrowings |  | 17,565 |  |
Accounts payable |  | 88,052 |  |
Other current liabilities |  | 109,964 |  |
Deferred income tax liabilities |  | 15,160 |  |
Other non-current liabilities |  | 33,066 |  |
Total liabilities assumed |  | 263,807 |  |
Net assets acquired |  | 715,532 |  |
Goodwill |  | 82,863 |  |
Purchase price |  | $ | 798,395 |  |
The goodwill is attributable to the acquired workforce of Williamson-Dickie and the significant synergies expected to arise as a result of the acquisition. All of the goodwill was assigned to the Work segment and $52.3 million is expected to be deductible for tax purposes. The Dickies®, Kodiak®, Terra® and Walls® trademarks, which management determined to have indefinite lives, have been valued at $316.1 million. The Workrite® trademark, valued at $0.8 million, is being amortized over three years. Amortizable intangible assets have been assigned values of $78.6 million for customer relationships and $2.3 million for distribution agreements. Customer relationships are being amortized using an accelerated method over periods ranging from 10-13 years. Distribution agreements are being amortized on a straight-line basis over four years. Total transaction expenses for the Williamson-Dickie acquisition were $15.0 million, all of which were recognized in the year ended December 30, 2017 in the selling, general and administrative expenses line item in VF's Consolidated Statements of Income. The following unaudited pro forma summary presents consolidated information of VF as if the acquisition of Williamson-Dickie had occurred on January 3, 2016:
(In thousands) | Three Months Ended June 2017 (unaudited)
Total revenues | $ | 2,484,272 |
Income from continuing operations | 113,919 |
Earnings per common share from continuing operations |
Basic | $ | 0.29 |
Diluted | 0.28 |
These pro forma amounts have been calculated after applying VF’s accounting policies and adjusting the results of Williamson-Dickie to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant, and equipment and intangible assets had been applied from January 3, 2016, with related tax effects. Pro forma financial information is not necessarily indicative of VF’s operating results if the acquisition had been effected at the date indicated, nor is it necessarily indicative of future operating results. Amounts do not include any marketing leverage, operating efficiencies or cost savings that VF believes are achievable. Icebreaker On April 3, 2018, VF acquired 100% of the stock of Icebreaker Holdings Limited ("Icebreaker") for NZ$274.4 million ($198.5 million) in cash. The purchase price decreased NZ$1.0 million ($0.7 million) during the first quarter of Fiscal 2019 related to a working capital adjustment, and remains subject to further working capital and other adjustments. The purchase price was primarily funded with short-term borrowings. Icebreaker was a privately held company based in Auckland, New Zealand. Icebreaker®, the primary brand, specializes in high-performance apparel based on natural fibers, including Merino wool, plant-based fibers and recycled fibers. It is an ideal complement to VF's Smartwool® brand, which also features Merino wool in its clothing and accessories. Together, the Smartwool® and Icebreaker® brands will position VF as a global leader in the Merino wool and natural fiber categories. For the three months ended June 2018, Icebreaker contributed revenues of $25.7 million and a net loss of $0.8 million. The allocation of the purchase price is preliminary and subject to change, primarily for certain income tax matters. Accordingly, adjustments may be made to the value of the assets acquired and liabilities assumed as additional information is obtained about the facts and circumstances that existed at the acquisition date. The following table summarizes the estimated fair values of the Icebreaker assets acquired and liabilities assumed at the date of acquisition:
(In thousands) |  | April 3, 2018 |
Cash and equivalents |  | $ | 6,444 |  |
Accounts receivable |  | 16,781 |  |
Inventories |  | 31,728 |  |
Other current assets |  | 3,931 |  |
Property, plant and equipment |  | 3,858 |  |
Intangible assets |  | 98,041 |  |
Other assets |  | 4,758 |  |
Total assets acquired |  | 165,541 |  |
Short-term borrowings |  | 7,235 |  |
Accounts payable |  | 2,075 |  |
Other current liabilities |  | 21,919 |  |
Deferred income tax liabilities |  | 22,802 |  |
Other non-current liabilities |  | 433 |  |
Total liabilities assumed |  | 54,464 |  |
Net assets acquired |  | 111,077 |  |
Goodwill |  | 86,760 |  |
Purchase price |  | $ | 197,837 |  |
The goodwill is attributable to the acquired workforce of Icebreaker and the significant synergies expected to arise as a result of the acquisition. All of the goodwill has been assigned to the Outdoor segment and none is expected to be deductible for tax purposes. The Icebreaker® trademark, which management determined to have an indefinite life, has been valued at $70.1 million. Amortizable intangible assets have been assigned values of $27.8 million for customer relationships and $0.2 million for distribution agreements. Customer relationships are being amortized using an accelerated method over 11.5 years. Distribution agreements are being amortized on a straight-line basis over four years. Total transaction expenses for the Icebreaker acquisition of $7.4 million have been recognized in the selling, general and administrative expenses line item in the Consolidated Statements of Income, of which $4.1 million was recognized during the three months ended June 2018. In addition, the Company has recognized a $9.9 million gain on derivatives used to hedge the purchase price of Icebreaker in the other income (expense), net line item in the Consolidated Statements of Income, of which $0.3 million was recognized during the three months ended June 2018. Pro forma results of operations of the Company would not be materially different as a result of the Icebreaker acquisition and therefore are not presented. Altra On June 1, 2018, VF acquired 100% of the stock of Icon-Altra LLC, plus certain assets in Europe ("Altra"). The purchase price was $131.7 million in cash, subject to working capital and other adjustments and was primarily funded with short-term borrowings. Altra®, the primary brand, is an athletic and performance-based lifestyle footwear brand, based in Logan, Utah. Altra provides VF with a unique and differentiated technical footwear brand and a capability that, when applied across VF's footwear, direct-to-consumer and international platforms, will serve as a catalyst for growth. For the three months ended June 2018, Altra contributed revenues of $4.0 million and net income of $0.1 million. The Altra acquisition occurred late in the first quarter of Fiscal 2019, and VF is still in the process of valuing the assets acquired and liabilities assumed. Accordingly, the allocation of the purchase price is preliminary and subject to change, primarily for final adjustments to net working capital, income tax and limited other valuation matters. Adjustments may be made to the values of the acquired assets and liabilities as additional information is obtained about the facts and circumstances that existed at the valuation date. The following table summarizes the estimated fair values of the Altra assets acquired and liabilities assumed at the date of acquisition:
(In thousands) |  | June 1, 2018 |
Accounts receivable |  | $ | 10,101 |  |
Inventories |  | 9,434 |  |
Other current assets |  | 575 |  |
Property, plant and equipment |  | 1,214 |  |
Intangible assets |  | 59,700 |  |
Total assets acquired |  | 81,024 |  |
Accounts payable |  | 5,068 |  |
Other current liabilities |  | 7,415 |  |
Total liabilities assumed |  | 12,483 |  |
Net assets acquired |  | 68,541 |  |
Goodwill |  | 63,122 |  |
Purchase price |  | $ | 131,663 |  |
The goodwill is attributable to the significant growth and synergies expected to arise as a result of the acquisition. All of the goodwill was assigned to the Outdoor segment and is expected to be deductible for tax purposes. The Altra® trademark, which management determined to have an indefinite life, has been valued at $46.4 million. Amortizable intangible assets have been assigned values of $13.0 million for customer relationships and $0.3 million for distribution agreements. Customer relationships are being amortized using an accelerated method over 15 years. Distribution agreements are being amortized on a straight-line basis over four years. Total transaction expenses for the Altra acquisition of $2.3 million have been recognized in the selling, general and administrative expenses line item in the Consolidated Statements of Income during the three months ended June 2018. Pro forma results of operations of the Company would not be materially different as a result of the Altra acquisition and therefore are not presented.

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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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