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Acquisitions | 12 Months Ended
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Jan. 02, 2016
Business Combinations [Abstract] |
Acquisitions | Acquisitions The Company’s acquisitions have been accounted for using the purchase method of accounting and the acquired companies’ results have been included in the accompanying financial statements from the dates of the acquisitions. The Company incurred acquisition transaction costs of approximately $326,000 and $1,802,000 in 2014 and 2013, respectively, which are included in selling, general, and administrative expenses. The Company's acquisitions have historically been made at prices above the fair value of the acquired net assets, resulting in goodwill, due to expectations of synergies from combining the businesses. The Company is realizing synergies in connection with these acquisitions, including the use of the Company's existing distribution channels to expand sales of the products of the acquired businesses. 2014 On October 31, 2014, the Company acquired certain assets of the screen cylinder business of a U.S.-based company for approximately $9,174,000 in cash. This technology-based acquisition enhances the Company’s stock-preparation equipment product offerings to pulp and paper mills worldwide. On December 30, 2013, the Company acquired all the outstanding shares of a European producer of creping and coating blades for approximately $2,666,000 in cash, including $674,000 of cash acquired. An additional 1,000,000 euros, or approximately $1,091,000 of contingent consideration was paid to the sellers on January 4, 2016. The following table summarizes the purchase method of accounting for the acquisitions made in 2014 and the estimated fair values of assets acquired and liabilities assumed:
2014 Acquisitions (In thousands) |  | Total
Net Assets Acquired: |  |
Cash and cash equivalents |  | $ | 674 |
Inventories |  | 1,064 |
Other current assets |  | 324 |
Property, plant & equipment |  | 847 |
Intangibles |  |
Customer relationships |  | 4,700 |
Intellectual property |  | 2,600 |
Other |  | 360 |
Goodwill |  | 3,463 |
Total assets acquired |  | 14,032 |
Total liabilities assumed |  | 1,001 |
Net assets acquired |  | $ | 13,031 |
Purchase Price: |  |  |
Cash |  | $ | 11,840 |
Contingent consideration |  | 1,191 |
Total purchase price |  | $ | 13,031 |
The weighted-average amortization period for intangibles acquired in 2014 is 9 years, which includes weighted-average amortization periods of 8 years for customer relationships and 11 years for intellectual property. The excess of the purchase price for the acquisitions made in 2014 over the tangible and identifiable intangible assets was recorded as goodwill and amounted to approximately $3,463,000, of which $2,004,000 is deductible for tax purposes. During 2014, the Company made post-closing adjustment payments of $818,000 related to acquisitions completed prior to 2014. 2013 On April 12, 2013, the Company acquired all the outstanding stock of Companhia Brasileira de Tecnologia Industrial (CBTI) for approximately $8,140,000 in cash and $484,000 in assumed liabilities owed to Kadant. CBTI was a long-time licensee of the Company's doctoring, cleaning, filtration, and stock preparation products and is also a supplier of industrial drying systems. This acquisition furthered the Company's strategy of expanding its presence in emerging markets. At the closing date, approximately $3,550,000 of the purchase price was deposited into an escrow fund to secure certain indemnification obligations of the sellers. Approximately $1,248,000 of the escrow fund was released to the sellers in February 2014, $656,000 was released in April 2015, and the balance will be released on various dates ending on the fifth anniversary of the closing date, less the amount of any claims. On May 3, 2013, the Company acquired certain assets of the Noss Group (Noss), a Sweden-based developer and supplier of high-efficiency cleaners and approach flow systems, for approximately $7,196,000 in cash, including $101,000 of additional consideration paid as a post-closing adjustment in 2014. This acquisition expanded the Company's product offerings in its Stock-Preparation product line, particularly for virgin pulp and approach flow applications. In addition, Noss had a large installed base, and a high proportion of its revenues were parts and consumables products. At the closing date, approximately $1,970,000 of the purchase price was deposited into an escrow fund to secure certain indemnification obligations of the sellers. Substantially all of the escrow fund was released to the sellers in 2015. On November 6, 2013, the Company acquired all the outstanding shares of Carmanah Design and Manufacturing Inc. (Carmanah) for approximately $52,281,000 in cash, including $717,000 of additional consideration paid as a post-closing adjustment in 2014, and $171,000 of assumed liabilities owed to Kadant. Carmanah is a designer and manufacturer of stranders and related equipment used in the production of OSB. At the closing date, $6,705,000 of the purchase price was deposited into an escrow fund to secure certain tax, environmental, and other indemnification obligations of the sellers. Half of the escrow fund was released to the sellers in November 2014 and the remainder was released in May 2015. The acquisition of Carmanah extended Kadant's presence into the forest products industry and advanced the Company's strategy of increasing its parts and consumables business. The components of the purchase price and net assets acquired for 2013 acquisitions, as revised for the finalization of the valuation process and amounts paid in 2014, are as follows:
2013 Acquisitions (In thousands) |  | Total
Net Assets Acquired: |  |
Cash and cash equivalents |  | $ | 1,966 |
Accounts receivable |  | 8,523 |
Inventories |  | 17,757 |
Other assets |  | 3,237 |
Property, plant & equipment |  | 5,891 |
Intangibles |  |
Intellectual property |  | 18,786 |
Customer relationships |  | 5,340 |
Other |  | 2,893 |
Goodwill |  | 24,744 |
Total assets acquired |  | 89,137 |
Long-term deferred tax liabilities |  | 6,032 |
Other liabilities |  | 14,834 |
Total liabilities assumed |  | 20,866 |
Net assets acquired |  | $ | 68,271 |
Purchase Price: |  |  |
Cash |  | $ | 68,271 |
The weighted-average amortization period for intangibles acquired in 2013 is 9 years, which includes weighted-average amortization periods of 10 years for both intellectual property and customer relationships and 6 years for trademarks. The excess of the purchase price for the acquisitions made in 2013 over the tangible and identifiable intangible assets was recorded as goodwill and amounted to approximately $24,744,000, the majority of which is not deductible for tax purposes. Pro forma disclosures of the results of operations are not required, as the acquisitions are not considered material business combinations.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1497-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1490-128463 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1392-128463 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7008-128479 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1486-128463 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6927-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4845-128472 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1500-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1524-128463 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7000-128479 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4922-128472 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4934-128472 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4926-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1383-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6996-128479 + Details
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