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Business Acquisitions | 9 Months Ended
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Sep. 07, 2013
Business Combinations [Abstract] |
Business Acquisitions | BUSINESS ACQUISITIONS On October 9, 2012, the Company acquired all of the outstanding equity interests of PLG as well as certain other assets. Consideration paid to acquire PLG was approximately $1,249.5 million in cash. PLG markets casual and athletic footwear, apparel and related accessories for adults and children under well-known brand names including Sperry Top-Sider®, Saucony®, Stride Rite®, and Keds®. The Company accounted for the acquisition under the provisions of FASB ASC Topic 805, Business Combinations. The related assets acquired and liabilities assumed were recorded at fair value on the acquisition date. The operating results for PLG are included in the Company’s consolidated results of operations beginning October 9, 2012. The Company funded the transaction using a combination of approximately $88.8 million of cash on hand and new borrowings. The Company’s debt financing included net proceeds from the term loan debt associated with the New Credit Agreement and net proceeds from the Notes. During the first quarter of fiscal 2013, the Company reorganized its brand portfolio into three reportable operating segments, as described above. PLG’s operating results are included in the Performance Group and the Lifestyle Group operating segments. For the 12 weeks ended September 7, 2013, the Company incurred $7.4 million of acquisition-related transaction and integration costs. These costs include compensation expenses ($4.6 million), other purchased services ($2.5 million) and professional and legal fees ($0.3 million). For the 12 weeks ended September 8, 2012, the Company incurred $3.0 million of acquisition-related transaction and integration costs. These costs included professional and legal fees ($2.6 million) and other purchased services ($0.4 million). For the 12 weeks ended September 8, 2012, the Company incurred $1.4 million of acquisition-related interest expense. For the 36 weeks ended September 7, 2013, the Company incurred $30.5 million of acquisition-related transaction and integration costs. These costs include compensation expenses ($20.3 million), other purchased services ($6.2 million), amortization related to short-lived intangible assets ($2.4 million) and professional and legal fees ($1.6 million). For the 36 weeks ended September 8, 2012, the Company incurred $7.9 million of acquisition-related transaction and integration costs. These costs included professional and legal fees ($7.3 million) and other purchased services ($0.6 million). For the 36 weeks ended September 8, 2012, the Company incurred $1.4 million of acquisition-related interest expense. During the measurement period, the Company made certain post-closing adjustments related to the valuation of a receivable due from the seller, other assets and accruals, intangible assets and deferred income taxes that resulted in a net reduction to goodwill of $11.1 million. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed in connection with the PLG acquisition:
(In millions) | Initial valuation at December 29, 2012 |  | Measurement period adjustments |  | Adjusted preliminary valuation at September 7, 2013
Cash | $ | 23.6 |  |  | $ | — |  |  | $ | 23.6 |
Accounts receivable | 146.9 |  |  | 4.3 |  |  | 151.2 |
Inventories | 203.5 |  |  | — |  |  | 203.5 |
Deferred income taxes | 13.6 |  |  | — |  |  | 13.6 |
Other current assets | 13.2 |  |  | — |  |  | 13.2 |
Property, plant and equipment | 77.1 |  |  | — |  |  | 77.1 |
Goodwill | 419.6 |  |  | (11.1 | ) |  | 408.5 |
Intangible assets | 820.6 |  |  | — |  |  | 820.6 |
Other | 11.2 |  |  | 1.8 |  |  | 13.0 |
Total assets acquired | 1,729.3 |  |  | (5.0 | ) |  | 1,724.3 |
Accounts payable | 97.4 |  |  | — |  |  | 97.4 |
Other accrued liabilities | 40.0 |  |  | 1.5 |  |  | 41.5 |
Deferred income taxes | 294.7 |  |  | (6.5 | ) |  | 288.2 |
Accrued pension liabilities | 37.7 |  |  | — |  |  | 37.7 |
Other liabilities | 10.0 |  |  | — |  |  | 10.0 |
Total liabilities assumed | 479.8 |  |  | (5.0 | ) |  | 474.8 |
Net assets acquired | $ | 1,249.5 |  |  | $ | — |  |  | $ | 1,249.5 |
The allocations of the purchase price above are still considered preliminary and are based upon valuation information available and estimates and assumptions made at December 29, 2012 and September 7, 2013. The Company is still verifying data and finalizing information related to the valuation and recording of identifiable intangible assets, deferred income taxes and uncertain tax provisions, accrued pension liabilities and the resulting effects on the amount of recorded goodwill. The Company expects to finalize these matters within the measurement period, which will close during the fourth quarter of fiscal 2013. The excess of the purchase price over the fair value of net assets acquired of $408.5 million was preliminarily recorded as goodwill in the consolidated condensed balance sheets and has been assigned to the Performance Group and Lifestyle Group reportable operating segments as follows:
(In millions) | Goodwill from the acquisition of PLG
Performance Group | $ | 82.4 |
Lifestyle Group | 326.1 |
Total | $ | 408.5 |
The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of PLG. Substantially all of the goodwill is not amortizable for income tax purposes. Intangible assets acquired in the acquisition were preliminarily valued as follows:
(In millions) | Intangible asset |  | Useful life
Trade names and trademarks | $ | 670.8 |  |  | Indefinite
Customer lists | 100.5 |  |  | 3-20 years
Licensing agreements | 28.8 |  |  | 4-5 years
Developed product technology | 14.8 |  |  | 3-5 years
Backlog | 5.1 |  |  | 6 months
Net favorable leases | 0.6 |  |  | 10 years
Total intangible assets acquired | $ | 820.6 |  |  |
The Company preliminarily assigned fair values to the identifiable intangible assets through a combination of the relief from royalty and the excess earnings methods. At the time of the acquisition, a step-up in the value of inventory of $4.0 million was recorded in the allocation of the purchase price based on valuation estimates, all of which was charged to cost of sales in the fourth quarter of fiscal 2012 as the inventory was deemed sold. In addition, fixed assets were written up by approximately $18.8 million to their estimated fair market value based on a valuation method that included both cost and market approaches. This additional step-up in value is being depreciated over the estimated remaining useful lives of the assets.

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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 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6996-128479 Reference 2: 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=7488404&loc=d3e7000-128479 Reference 3: 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=6910749&loc=d3e4922-128472 Reference 4: 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=6910749&loc=d3e4926-128472 Reference 5: 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=6910749&loc=d3e4934-128472 Reference 6: 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 7: 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 8: 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 9: 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=7488404&loc=d3e6927-128479 Reference 10: 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 11: 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 12: 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=7488404&loc=d3e7008-128479 Reference 13: 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=6910749&loc=d3e4845-128472 Reference 14: 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 15: 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 + Details
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