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Acquisitions | 6 Months Ended
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Jun. 30, 2020
Business Combinations [Abstract] |
Acquisitions | Acquisitions Perstorp Holding AB's Caprolactone Business On February 13, 2019, we completed the acquisition of 100% of the equity of Perstorp UK Ltd with Perstorp Holding AB ("Seller"), including the Seller's entire caprolactone business ("Caprolactone Business"), herein referred to as the "Caprolactone Acquisition." The Caprolactone Acquisition was completed for an aggregate purchase price of €578.9 million ($652.5 million), less assumed debt of €100.4 million ($113.1 million). At closing, the assumed debt was settled with an affiliate of the Seller. The Caprolactone Acquisition has been integrated into our Performance Chemicals segment and included within our engineered polymers product line. The Caprolactone Acquisition contributed Net sales of $31.6 million and $34.3 million for the three months ended June 30, 2020 and 2019, respectively, and $67.9 million and $58.5 million for the six months ended June 30, 2020 and 2019, respectively, to our consolidated operating results. A substantial portion of the Caprolactone Business was integrated into our existing Performance Chemicals operations during 2019. As a result, we were no longer able to separate operating performance of the Caprolactone Acquisition from our existing Performance Chemicals' operating results. Purchase Price Allocation The following table summarizes the consideration paid for the Caprolactone Business and the assets acquired and liabilities assumed, which was finalized in Q4 2019:
Purchase Price Allocation |  |
In millions | Weighted Average Amortization Period | Fair Value
Cash and cash equivalents |  | $ | 0.7 |
Accounts receivable |  | 15.7 |
Inventories (1) |  | 21.7 |
Prepaid and other current assets |  | 1.9 |
Property, plant and equipment |  | 86.3 |
Operating lease assets, net |  | 1.8 |
Intangible assets (2) |  |
Customer relationships | 17 years | 159.0 |
Developed technology | 12 years | 64.8 |
Brands | 17 years | 67.0 |
Non-compete agreement | 3 years | 0.5 |
Goodwill |  | 295.1 |
Other assets |  | 1.3 |
Total fair value of assets acquired |  | $ | 715.8 |
Accounts payable |  | 13.6 |
Accrued expenses |  | 2.3 |
Long-term debt |  | 113.1 |
Operating lease liabilities |  | 1.7 |
Deferred income taxes |  | 45.7 |
Total fair value of liabilities assumed |  | $ | 176.4 |
Cash and restricted cash acquired (3) |  | 1.5 |
Total cash paid, less cash and restricted cash acquired |  | $ | 537.9 |
______________ (1) Fair value of finished goods inventories acquired included a step-up in the value of approximately $8.4 million, all of which was expensed in the three months ended March 31, 2019. The expense is included in "Cost of sales" on the condensed consolidated statement of operations. Inventories are accounted for on a first-in, first-out basis of accounting. (2) The aggregate amortization expense was $4.7 million and $3.9 million for the three months ended June 30, 2020 and 2019, respectively, and the aggregate amortization expense was $9.5 million and $5.8 million for the six months ended June 30, 2020 and 2019, respectively. Estimated amortization expense is as follows: 2020 - $19.0 million, 2021 - $19.0 million, 2022 - $18.9 million, 2023 - $18.8 million, and 2024 - $18.8 million. The estimated pre-tax amortization expense may fluctuate due to changes in foreign currency. (3) Cash and cash equivalents and restricted cash were $0.7 million and $0.8 million, respectively, at closing. Restricted cash is included in "Prepaid and other current assets" on the consolidated balance sheet. Unaudited Pro Forma Financial Information The following unaudited pro forma results of operations assume that the Caprolactone Acquisition occurred at the beginning of the periods presented. These unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations would have been if the acquisition occurred at the beginning of the periods presented, nor are they indicative of future results of operations. The pro forma results include additional interest expense on the debt issued to finance the acquisition, amortization and depreciation expense based on the estimated fair value and useful lives of intangible assets and tangible assets, and related tax effects. The pro forma results presented below are adjusted for the removal of Acquisition and other-related costs for the six months ended June 30, 2019 of $32.0 million.
In millions |  |  | Six Months Ended June 30, 2019 |  |  |  |
Net sales |  |  | $ | 647.3 |  |  |  |  |
Income (loss) before income taxes |  |  | 127.0 |  |  |  |  |
Diluted earnings (loss) per share |  |  | $ | 2.49 |  |  |  |  |
Acquisition and other-related costs Costs incurred to complete and integrate the Caprolactone Acquisition noted above into our Performance Chemicals segment are expensed as incurred on our condensed consolidated statement of operations. The following table summarizes such costs.
| Three Months Ended June 30, |  |  |  | Six Months Ended June 30, |  |
In millions | 2020 |  | 2019 |  | 2020 |  | 2019
Legal and professional service fees | $ | 0.4 |  |  | $ | 0.8 |  |  | $ | 1.7 |  |  | $ | 10.9 |
Loss on hedging purchase price | — |  |  | — |  |  | — |  |  | 12.7 |
Acquisition-related costs | $ | 0.4 |  |  | $ | 0.8 |  |  | $ | 1.7 |  |  | $ | 23.6 |
Inventory fair value step-up amortization (1) | — |  |  | — |  |  | — |  |  | 8.4 |
Acquisition and other-related costs | $ | 0.4 |  |  | $ | 0.8 |  |  | $ | 1.7 |  |  | $ | 32.0 |
______________ (1) Included within "Cost of sales" on the condensed consolidated statement of operations.

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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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