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Acquisition | 6 Months Ended
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Jul. 13, 2019
Business Combinations [Abstract] |
Acquisition | 5. ACQUISITION On December 14, 2018, the company completed the acquisition of 100% of the outstanding membership interests of Canyon Bakehouse, LLC (“Canyon”), a leading gluten-free bread baker, from its members for total consideration of $205.2 million, including an earn-out recorded as contingent consideration. We believe the acquisition of Canyon strengthens our position as the second-largest baker in the U.S. by giving us access to the fast-growing gluten-free bread category. The acquisition has been accounted for as a business combination. The total goodwill recorded for this acquisition was $80.5 million and it is deductible for tax purposes. During fiscal 2018, the company incurred $4.5 million of acquisition-related costs for Canyon. This table is based on preliminary valuations for the assets acquired, liabilities assumed, and the allocated intangible assets and goodwill. The open valuations primarily relate to deferred taxes. The acquisition-related costs were recorded in the selling, distribution and administrative expense line item in our Condensed Consolidated Statements of Income. The following table summarizes the consideration paid for Canyon based on the fair value at the acquisition date (amounts in thousands):
Fair Value of consideration transferred: |  |  |  |
Cash consideration paid |  | $ | 200,208 |
Working capital adjustments |  |  | 314 |
Contingent consideration |  |  | 4,700 |
Total consideration |  | $ | 205,222 |
Recognized amounts of identifiable assets acquired and liabilities assumed: |  |  |  |
Property, plant, and equipment |  | $ | 42,165 |
Identifiable intangible assets |  |  | 78,380 |
Financial assets |  |  | 4,211 |
Net recognized amounts of identifiable assets acquired |  |  | 124,756 |
Goodwill |  | $ | 80,466 |
Goodwill decreased $0.1 million from December 29, 2018 to July 13, 2019 due to changes in working capital, property, plant, and equipment, and the financial assets. See Note 7, Goodwill and Other Intangible Assets, of Notes to Condensed Consolidated Financial Statements of this Form 10-Q for changes in goodwill. The following table presents the acquired intangible assets subject to amortization (amounts in thousands, except amortization periods):
| Total |  |  | Weighted average amortization years |  |  | Attribution Method
Trademarks | $ | 41,700 |  |  |  | 40.0 |  |  | Straight-line
Customer relationships |  | 36,400 |  |  |  | 25.0 |  |  | Sum of year digits
Noncompete agreements |  | 280 |  |  |  | 1.7 |  |  | Straight-line
Total intangible assets | $ | 78,380 |  |  |  | 32.9 |  |  |
The fair value of trade receivables was $3.6 million. The gross amount of the receivables was $3.7 million with $0.1 million determined to be uncollectible. We did not acquire any other class of receivables as a result of the Canyon acquisition. The contingent consideration liability was reviewed as of July 13, 2019 to determine the probable payment. Changes in the fair value of the contingent consideration liability since acquisition are recognized as a selling, distribution, and administrative expense in the Condensed Consolidated Statements of Income. The contingent consideration liability is recorded in other accrued liabilities on our Condensed Consolidated Balance Sheets. Acquisition pro formas We determined that the consolidated results of operations for Canyon were immaterial in the aggregate and the pro forma financial statements are not required for fiscal 2019. The purchase price allocation attributable to Canyon is preliminary. When all relevant information is obtained, resulting changes, if any, to our provisional purchase price allocation will be adjusted to reflect new information obtained about the facts and circumstances that existed as of the respective acquisition dates that, if known, would have affected the measurement of the amounts recognized as of those dates.

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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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