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Acquisition | 9 Months Ended
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Dec. 30, 2018
Business Combinations [Abstract] |
Acquisition | Acquisition On December 7, 2018, the Company completed the acquisition of all of the issued and outstanding common stock of Alpha Technologies Services, Inc. (“ATS”) and Alpha Technologies Ltd. (“ATL”), resulting in ATS and ATL becoming wholly-owned subsidiaries of the Company (the “share purchase”). Additionally, the Company acquired substantially all of the assets of Alpha Technologies Inc. and certain assets of Altair Advanced Industries, Inc. and other affiliates of ATS and ATL (all such sellers, together with ATS and ATL, “Alpha”), in each case in accordance with the terms and conditions of certain restructuring agreements (collectively, the “asset acquisition” and together with the share purchase, the “acquisition”). Based in Bellingham, Washington, Alpha is a global industry leader in the comprehensive commercial-grade energy solutions for broadband, telecom, renewable, industrial and traffic customers around the world. The aggregate purchase consideration for the acquisition was $750,000, of which $650,000 was paid in cash and the balance was settled by issuing 1,177,630 shares of EnerSys common stock. These shares were issued out of the Company's treasury stock and were valued at $84.92 per share, which was based on the thirty-day volume weighted average stock price of the Company’s common stock at closing. The fair value of the 1,177,630 shares had an approximate closing date fair value of $100,000. The Company funded the cash portion of the acquisition with borrowings from the Amended Credit Facility as defined in Note 10. See Note 10 for additional information. The acquisition expands the Company's footprint in broadband and telecom markets. The Company recorded the acquisition using the acquisition method of accounting and recognized the assets acquired and liabilities assumed at their estimated fair values as of the date of the acquisition. The results of operations of Alpha have been included in the Company’s Americas segment beginning December 8, 2018. Included within operating expenses in the Company's Consolidated Condensed Statements of Income are acquisition costs of $10,192 and $12,360, respectively, for the third quarter and nine months of fiscal 2019. For the third quarter and nine months of fiscal 2019 ended December 30, 2018, the contribution of the acquisition to net sales was $26,795. Alpha recorded a net loss of $4,440 for the third quarter and nine months of fiscal 2019 ended December 30, 2018, excluding the effect of the transaction and integration costs, and interest expense on the debt to finance the acquisition. The following table summarizes the preliminary fair values assigned to the assets acquired and liabilities assumed and resulting goodwill. These values are not yet finalized and are subject to change, which could be significant. The amounts recognized will be finalized as the information necessary to complete the analyses is obtained, but no later than December 7, 2019 or one year from the acquisition date (“the measurement period”). The acquired assets and assumed liabilities include the following:
Accounts receivable |  | $ | 115,467 |
Inventories |  | 93,262 |
Other current assets |  | 6,822 |
Other intangible assets |  | 319,434 |
Property, plant and equipment |  | 20,507 |
Other assets |  | 7,165 |
Total assets acquired |  | $ | 562,657 |
Short-term debt |  | 264 |
Accounts payable |  | 34,009 |
Accrued liabilities |  | 43,636 |
Deferred income taxes |  | 60,292 |
Other liabilities |  | 10,802 |
Total liabilities assumed |  | $ | 149,003 |
Net assets acquired |  | $ | 413,654 |
Purchase price |  | $ | 750,000 |
Less: Fair value of acquired identifiable assets and liabilities |  | 413,654 |
Goodwill |  | $ | 336,346 |
The following table summarizes the estimated fair value of Alpha's identifiable intangible assets and the initial assessment of their respective estimated lives:
|  | Type |  | Life in Years |  | Fair Value
Trademarks |  | Indefinite-lived |  | Indefinite |  | $ | 88,849 |
Customer relationships |  | Finite-lived |  | 13 |  | 188,805 |
Technology |  | Finite-lived |  | 10 |  | 41,780 |
Total identifiable intangible assets |  |  |  |  |  | $ | 319,434 |
The preliminary purchase price of the acquisition has been allocated to the Company’s tangible and identifiable intangible assets acquired and liabilities assumed, based on their estimated acquisition date fair values. The excess of the purchase price over the net tangible and intangible assets is recorded to goodwill. Estimated goodwill deductible for tax purposes is $42,040. The preliminary allocation of purchase price is based upon a valuation undertaken by the Company and is subject to change during the measurement period. The initial accounting for the acquisition is incomplete pending final valuation of the tangible and identifiable intangible assets acquired and liabilities assumed. The following unaudited summary information is presented on a consolidated pro forma basis as if the acquisition had occurred on April 1, 2017:
|  | Quarter ended |  | Nine months ended
|  | December 30, 2018 |  | December 31, 2017 |  | December 30, 2018 |  | December 31, 2017
Net sales |  | $ | 805,839 |  |  | $ | 799,416 |  |  | $ | 2,482,137 |  |  | $ | 2,302,525 |
Net earnings (loss) attributable to EnerSys stockholders |  | 62,354 |  |  | (28,713 | ) |  | 181,941 |  |  | 66,724 |
Net earnings (loss) per share attributable to EnerSys stockholders - basic |  | 1.44 |  |  | (0.66 | ) |  | 4.21 |  |  | 1.52 |
Net earnings per share attributable to EnerSys stockholders - assuming dilution |  | 1.42 |  |  | (0.66 | ) |  | 4.14 |  |  | 1.50 |
The pro forma amounts include additional interest expense on the debt issued to finance the purchases, amortization and depreciation expense based on the estimated fair value and useful lives of intangible assets and plant assets, and related tax effects. The pro forma results are not necessarily indicative of the combined results had the Alpha acquisition been completed on April 1, 2017, nor are they indicative of future combined results. The pro forma results for the third quarter and nine months of fiscal 2018 exclude pre-tax transaction costs of $10,192 and $12,360, respectively, as well as the pre-tax amortization of the acquisition date step up to fair value of inventories of $3,747 (these were recognized in the actual results of the third quarter and nine months fiscal 2019) as they are considered non-recurring in nature. The remeasurement of Alpha's deferred taxes due to the Tax Act are also being excluded in arriving at these pro forma results. Other Intangible Assets Information regarding the Company’s other intangible assets are as follows:
|  | Balance as of
|  | December 30, 2018 |  | March 31, 2018
|  | Gross Amount |  | Accumulated Amortization |  | Net Amount |  | Gross Amount |  | Accumulated Amortization |  | Net Amount
Indefinite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |  |
Trademarks |  | $ | 185,450 |  |  | $ | (953 | ) |  | $ | 184,497 |  |  | $ | 97,444 |  |  | $ | (953 | ) |  | $ | 96,491 |
Finite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  | 254,527 |  |  | (37,102 | ) |  | 217,425 |  |  | 66,973 |  |  | (31,500 | ) |  | 35,473 |
Non-compete |  | 2,998 |  |  | (2,799 | ) |  | 199 |  |  | 2,852 |  |  | (2,759 | ) |  | 93 |
Technology |  | 64,292 |  |  | (10,362 | ) |  | 53,930 |  |  | 22,769 |  |  | (8,872 | ) |  | 13,897 |
Trademarks |  | 2,003 |  |  | (1,212 | ) |  | 791 |  |  | 2,003 |  |  | (1,151 | ) |  | 852 |
Licenses |  | 1,483 |  |  | (1,182 | ) |  | 301 |  |  | 1,491 |  |  | (1,156 | ) |  | 335 |
Total |  | $ | 510,753 |  |  | $ | (53,610 | ) |  | $ | 457,143 |  |  | $ | 193,532 |  |  | $ | (46,391 | ) |  | $ | 147,141 |
The Company’s amortization expense related to finite-lived intangible assets was $3,105 and $7,220, for the third quarter and nine months of fiscal 2019, respectively. The expected amortization expense based on the finite-lived intangible assets as of December 30, 2018, is $1,766 for the remainder of fiscal 2019, $8,281 in fiscal 2020, $8,023 in fiscal 2021, $7,941 in fiscal 2022 and $5,689 in fiscal 2023. Goodwill The changes in the carrying amount of goodwill by reportable segment are as follows:
|  | Americas |  | EMEA |  | Asia |  | Total
Balance at March 31, 2018 |  | $ | 151,255 |  |  | $ | 155,825 |  |  | $ | 45,725 |  |  | $ | 352,805 |
Goodwill acquired |  | 336,346 |  |  | — |  |  | — |  |  | 336,346 |
Foreign currency translation adjustment |  | (1,888 | ) |  | (11,194 | ) |  | (3,473 | ) |  | (16,555 | )
Balance as of December 30, 2018 |  | $ | 485,713 |  |  | $ | 144,631 |  |  | $ | 42,252 |  |  | $ | 672,596 |

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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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- References No definition available. + Details
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